General Mills is exiting its dough manufacturing business in Israel, leaving behind a controversial Pillsbury plant in the West Bank.
The global food company is selling its majority stake to joint-venture partner Bodan Holdings, an Israeli-owned business group.
General Mills operates a Pillsbury factory in the Atarot Industrial Park, the largest industrial park in the Jerusalem area and one of the Israeli settlements in the West Bank. While General Mills made its dough products there, it did not own the plant, a company spokeswoman said.
The Golden Valley-based company made clear, despite the divestment, it is not leaving Israel altogether.
"None of our products will be produced there as it was a dough facility only," spokeswoman Kelsey Roemhildt said. "We will continue to sell our products in Israel and look forward to continuing to serve Israeli consumers with our other brands."
In 2020, the United Nations placed General Mills on a list of 112 companies doing business in territory it considers illegally occupied, alongside other U.S. companies such as Airbnb and Expedia. But the report drew condemnation from the Anti-Defamation League for being a "blacklist" and "highly problematic."
The American Friends Service Committee, a Quaker activist group, launched a boycott campaign targeting Pillsbury soon after.
In response to General Mills' divestment, the group said Wednesday that it "applauds this decision."
The boycott drew the support of several Pillsbury heirs, who wrote in an editorial "we no longer can in good conscience buy products bearing our name."
"We call on General Mills to stop doing business on occupied land," Charlie Pillsbury wrote on behalf of some family members.
The company said last year that the Pillsbury plant "has a history of continuing employment and employee satisfaction. Many of the plant's Palestinian workers have been employed at the facility for several years, working alongside Israeli colleagues."
General Mills also said all of the employees have full benefits "without prejudice to race, religion or nationality."
Steve Hunegs, executive director of the Jewish Community Relations Council of Minnesota and the Dakotas, said in a statement Thursday he "appreciates General Mills' reaffirmation that the recent sale of its stake in an Israeli joint venture is a business decision, not a boycott, and that the Minnesota-based company looks forward to continuing to sell its products in the Israeli market."
General Mills has been shrinking its international footprint as it focuses more on the North American market and "advantaged global platforms," such as Mexican food, super-premium ice cream and snack bars, the company said.
"This divestiture represents another step in General Mills' Accelerate strategy, which is centered on strategic choices about where to prioritize our resources to drive superior returns," it said this week.