Ben & Jerry's sold in 2000 with 1 condition — now former partners are 'turning up the heat' to force compliance

For more than two decades, that arrangement held. Until it didn't.

By Jan. 1 this year, Magnum had said goodbye to many of Ben & Jerry's independent directors except for one Unilever-appointed director and CEO, Dairy Reporter noted. (3)

In 2024, former independent members of Ben & Jerry’s Defined Purpose Board filed a lawsuit against Magnum, which is still pending in the Southern District Court of New York. They allege that Magnum’s removal of independent directors violated the original merger agreement. (4)

The board was recently joined by The Ben & Jerry's Foundation, an independent charitable organization funded by Unilever/The Magnum Ice Cream Company through Ben & Jerry’s. The foundation won a court ruling to join that lawsuit after Magnum allegedly stopped providing it with approved funding, Vermont Business Magazine reported. (5)

A look at the lawsuit

The legal fight centers on a governance structure deliberately baked into the 2000 sale agreement. At the time of the acquisition, Unilever committed that Ben & Jerry's would retain an independent board focused on "providing leadership for Ben & Jerry's social mission and brand integrity," FoodOnline reported. (6)

Cohen and Greenfield said at the time they hoped the company would "continue to expand its role in society" under Unilever's ownership. (6)

Amid the demerger of Magnum from Unilever, however, Magnum established a new Code of Business Principles that sets out ethical and behavioral principles by which all employees and functionaries are required to abide.

Three of the former independent directors “termed out” following the introduction of harmonized term limits (a nine-year limit, in accordance with the UK Corporate Governance Code), which went into effect during the demerger. The three remaining independent directors chose not to affirm the new company’s Code of Business Principles, therefore becoming ineligible for re-election to the Board.

Magnum ultimately framed the decision as different from outright removal. But the independent board has called the move a coordinated dismantling. (3)

Ben & Jerry’s co-founder and former board chair, Greenfield, had already resigned after 47 years with the company and separately filed an independent defamation case in California. (4)

Ben promises a boycott

Cohen, who is neither part of the independent members of the board nor part of the foundation and is not a party to the legal proceedings, told the New York Times: "We're turning up the heat.” (2)

He has asked Magnum to sell Ben & Jerry's to a values-aligned investor group, and threatened a boycott of all Magnum products — which include Breyers, Klondike and Talenti — if it doesn't comply.

“Ben & Jerry’s is a proud and thriving part of The Magnum Ice Cream Company and is not for sale,” Steve Hufton, who leads Magnum’s external communications, told Moneywise in response. “Our focus remains where it belongs: on supporting the Ben & Jerry’s team and its three-part mission — making great ice cream and advocating on the progressive causes the business cares about.”

Additionally, according to Hufton, Magnum invited the foundation trustees to collaborate on implementing a stronger governance framework — one that was “rooted in transparency and accountability.” Because the foundation allegedly declined, he explained, Magnum was left with no choice but to pause forward funding.

The financials behind the ice cream company’s case

Ben & Jerry’s is doing really well, Hufton added, noting that last year delivered over three percent organic sales growth and gained market share across the U.S. and Europe, going from four markets in 2000 to over 40 today. In the meantime, he reported that more than half a billion has been invested in the social mission, which has “continued to go from strength to strength.”

“Recent steps to update Ben & Jerry’s corporate governance are wholly aligned with the merger agreement and standard corporate governance across the organization; nothing more than that,” he continued. “Suggesting our actions are anything more is just not true; they are not and never have been. We remain committed to having a Board, led by an Independent Director, to continue its role of helping guide the social mission and brand integrity, alongside the CEO.”

However, things seem still in flux for the ice-cream company. David Stever, the former Ben & Jerry's CEO of 35 years, was recently named CEO of Jeni's Splendid Ice Creams — a direct rival and certified B Corp. (4)

Meanwhile, more than 130,000 people have signed a petition requesting Magnum to sell Ben & Jerry's to values-aligned investors, noting other mission-driven company successes.