A Liberal Brooklyn Food Co-op Boycotts Israeli Products. New Jersey Regulators Are Scrutinizing It.

In May, a Brooklyn food co-op started boycotting Israeli products — a move supporters described as a show of support for Palestinian rights during the war in Gaza.

Now, the local grocer once described as being frequented by “kooky Brooklyn hippies” is drawing scrutiny from state pension officials across the Hudson River.

The Park Slope Food Co-op’s decision to stop stocking a handful of Israeli products is now the subject of a review by Gov. Mikie Sherrill’s administration, according to records reviewed by POLITICO. New Jersey officials are weighing whether to bar the state’s pension fund from investing in the co-op.

There’s a catch: New Jersey’s pension fund does not hold any investments in the co-op. The state has nothing to divest.

The Brooklyn co-op is not the only business under review. Other records obtained by POLITICO show state officials are also considering barring investment in a small European video game developer for protesting Israel’s conduct in Gaza — even though the pension fund is not invested in it. And Ben & Jerry’s parent company, Magnum Ice Cream, may face divestment over the ice cream maker’s 2021 announcement that it sought to end sales in Israeli-occupied territories. The pension fund held approximately $3.7 million in Magnum as of June 30.

That review revisits a longstanding dispute over Ben & Jerry’s: New Jersey and other states divested from their former parent company, Unilever, years ago over those same comments.

This is the first time the Sherrill administration has launched reviews that could bar investment in businesses under the decade-old law signed by then-Gov. Chris Christie. The review comes as political and public support for Israel has cratered, especially among Democrats — and as a state lawmaker prepares legislation that would repeal the restriction in response to the pending regulatory actions.

“This Christie-era law is both antiquated and tone-deaf to today’s political realities,” Assemblymember Ravi Bhalla said in a statement to POLITICO. “I’ll be introducing legislation to repeal the anti-[Boycott, Divestment, Sanctions movement] law and fix this mistake.”

Sean Higgins, a spokesperson for Sherrill, declined to comment on the pro-Israel law or pending regulatory matters. Sherrill, a Democrat, is in her first year in office.

New Jersey law bars state pension investments in companies that boycott Israel or Israeli businesses. Supporters of the law say that it underscores support for Israel and combats antisemitism, while opponents say it penalizes political expression in support of Palestinian rights.

State Treasury spokesperson Darryl Isherwood said no final decision has been made on whether to add the Park Slope Food Co-op or Magnum Ice Cream to the list of businesses prohibited from state pension investment. New Jersey Treasury officials “preliminarily determined” the businesses boycott Israel after they were identified in a database reviewed by state officials, but declined to elaborate on their “internal processes.”

A decision to bar the video game developer, Speculative Agency, from pension investment could come as soon as Monday. That company, however, also does not have any stock currently invested in the pension system.

New Jersey has rarely used the divestment law over the last decade. As of August, only four businesses have faced divestment under the law, which seeks to push back against the Boycott, Divestment and Sanctions movement, a Palestinian-led movement that seeks to economically isolate Israel.

The co-op’s boycott has already drawn litigation and political opposition. Rep. Dan Goldman (D-N.Y.) urged co-op members to oppose the boycott and his successor, Rep.-elect Brad Lander (D-N.Y.), also opposes it.

The co-op — which is member-owned and does not issue stock — declined to comment.

Supporters of the New Jersey law say that adding the co-op to the state’s list of companies barred from pension investment would be a “moral victory,” even if it’s symbolic.

“If [the co-op] gets put on a list of companies that are participating in BDS, that in and of itself sends a message,” Jason Shames, CEO of the Jewish Federation of Northern New Jersey, said in an interview.

The parent company of Ben & Jerry’s, Magnum Ice Cream, has more to lose — but has a more complicated relationship with Israel.

In 2021, Ben & Jerry’s faced international attention after it publicly said that it was “inconsistent with our values for Ben & Jerry’s ice cream to be sold in the Occupied Palestinian Territory.”

That statement led to state pension funds across the country dumping their investments in Ben & Jerry’s parent company at the time, Unilever. The ice cream company now has a new corporate parent company in Magnum Ice Cream, although Ben & Jerry’s website still states that it won’t sell its products in Israeli-occupied territories — which is the reason New Jersey officials said they are considering divestment in Magnum Ice Cream.

In 2022, Unilever sold the rights to its Hebrew and Arabic language products to an Israeli-based company. That company sells Ben & Jerry’s branded products throughout Israel, but is a separate entity with no economic ties to Ben & Jerry’s global brand and Magnum Ice Cream.

In a statement to POLITICO, a spokesperson for Magnum Ice Cream denied boycotting Israel, citing an internal policy that says “We conduct business in compliance with all relevant trade controls and do not engage in unlawful boycotts.” Magnum Ice Cream is also sold in Israel.

Speculative Agency, the video game start-up, is subject to state review after it rejected funding from Microsoft, citing the company’s work with the Israeli government. Niels Monshouwer, a co-founder of the video game start-up, said in an email to POLITICO that the business is engaged in the BDS movement but was “not very worried” about the scrutiny from New Jersey regulators.

“We don’t expect to have dealings within New Jersey, as nobody from our team has dealings with New Jersey, and hardly with the US,” Monshouwer said.