Israeli manufacturer suing Ben and Jerry's over boycott

Pictured is the company's factory in Be'er Tuvia, Israel, on July 21, 2021. (Emmanuel Dunand/AFP/Getty Images via CNN)

Ben and Jerry's decision to stop manufacturing ice cream in Israel sparked a lawsuit from its Israeli distributor.

American Quality Products (AQP), which distributes Ben and Jerry's in Israel, said Thursday that it's suing the ice cream and its parent company Unilever for "unlawfully terminating its 34-year business relationship in order to boycott Israel." The company wants a U.S. federal court to deem the termination illegal so the Israeli unit can keep selling the ice cream in the country.

Last summer, Ben and Jerry's informed AQP that its agreement with the company will not be renewed when it expires at the end of 2022. After that, the company's ice cream will no longer be sold in the Palestinian territories, but will continue to be sold in Israel "through a different arrangement."

Thursday's lawsuit, filed in New Jersey, said that Ben and Jerry's owner Unilever's demands to sell ice cream only in certain parts of Israel is illegal under Israeli law.

"Ben and Jerry's and Unilever's actions are misguided, unlawful and immoral. Boycotting Israel should come with a heavy price tag, and therefore, we are taking Unilever to court," AQP owner Avi Zinger said in a release. "There is still time to do the right thing. Renew my license and leave ice cream out of the political debate."

Ben and Jerry's told CNN Business would not comment on the lawsuit. Unilever didn't immediately respond to comment to the lawsuit.

The Vermont-based ice cream company, which has been doing business in Israel since 1987, has come under scrutiny for its relationships in Israel in recent years as tensions in the region have flared. Critics have taken the company to task for doing business in Israel — especially in West Bank settlements, considered illegal under international law — arguing it doesn't align with Ben and Jerry's liberal image.

The company had been mostly silent on the topic. In 2015, Ben and Jerry's posted on its website that it was "keenly aware of how complex the local market can be," and it believed it could affect positive change by maintaining a presence in the region.

But the company had a change of heart in July 2021, saying it heard and recognized the concerns shared by its fans and partners, opting to get out of making ice cream in Israel and selling in the Palestinian territories altogether.

The decision sparked backlash in the country, including from Prime Minister Naftali Bennett who said that Ben and Jerry's has decided to brand itself as the "anti-Israel ice cream."