Unilever, one of the world's largest multinational consumer goods companies, has been in the mire over the past few days.
As if its marketing faux pas earlier this week in which its Ben & Jerry's division began a bizarre and utterly misguided politicization of ice cream when it instructed its Israel operations to stop selling ice cream in what it termed "Occupied Palestinian Territories" wasn't enough, the company is now complaining about the high cost of commodities which are affecting its logistical operations.
The result of this is that Unilever's stock, which is listed on the London Stock Exchange, has suffered a significant fall this morning and is down by 5.66% since the market opened at 8.00am.
That equates to a drop of 225 points in just 4 hours, making it one of London's big-cap fallers today.
Unilever, which manufactures and distributes consumer products and foodstuffs in many regions of the world, stated today that it has experienced cost inflation pressure through its second quarter, which is forcing it to hike prices for several products in certain regions.
The costs concerned relate to important manufacturing materials such as packaging, as well as fuel prices for transport and logistics about delivering food products between factories and warehouses.
Faced with these challenges, it was perhaps not an ideal commercial decision for Unilever's Ben & Jerry's ice cream brand to begin to jump on the 'Boycott, Divest, Sanctions' (BDS) bandwagon and state that it will no longer sell ice cream in the occupied West Bank and East Jerusalem.
Avraham Zinger, the CEO of Ben and Jerry's Israel, was interviewed earlier this week on national television (in Hebrew), stating that he hopes the public will realize that this is not a positive step and that commercial enterprises that already have factories and operations employing people in the West Bank should perhaps think twice before cutting off their own nose, as well as affecting consumers from all walks of life in those areas of the country.
Mr Zinger said that he would disobey the order from the parent company and continue sales throughout all of Israel. In turn, he was informed that his license to use the brand would not be renewed when the company’s contract expires at the end of next year. He said that most people do not realize that each division is operated separately, and that 160 employees work for Ben & Jerry’s Israel division.
Over the past 12 years, Unilever has shut down two factories in the West Bank, resulting in employees which were both Israeli and Palestinian, losing their jobs.
Yesterday, Isaac Herzog, President of the State of Israel, described this type of boycott, citing Ben & Jerry's, as "A new kind of terrorism".
Hardly an association that bodes well with investors and shareholders. Often, investor confidence is lowered substantially by firms that attempt to take extreme political sides, especially misguided ones such as this.
Blaming increasing transport and packaging costs is a vanilla excuse that is palatable when addressing shareholders on why the price has dropped and is more politically correct than admitting that the firm has put its foot in it politically.
The upshot is that Unilever stock languishes at a 1 month low, down 256 points over the past 30-day period and is now trading at £40.07 per share.
Its profit margins have been hit by rising costs, but ultimately the firm is a huge and well capitalized global industrial force, therefore it may result in just a bit of volatility.
However, rather like the Marmite product that the company produces, you love it or you hate it.