General Mills has sold its majority stake in its controversial dough manufacturing business in Israel to local firm Bodan Holdings, its partner in the joint venture.

In a statement, the US food major said the divestment “represents another step in General Mills’ Accelerate strategy, which is centred on strategic choices about where to prioritise our resources to drive superior returns”.

But the deal – for an undisclosed sum – sees the company ridding itself of involvement in a business based in contested land in the West Bank area of Jerusalem, for which it has received criticism from the Palestinian community and its supporters.

The Pillsbury dough factory is in the Atarot Industrial Park, the largest industrial park in the Jerusalem area and one of the Israeli settlements in the West Bank, an area that Palestinians claim as their own. The joint venture has been operational since 2002.

In 2020, the United Nations placed General Mills on a list of 112 companies doing business in territory it considers illegally occupied and The American Friends Service Committee, a Quaker activist group, launched a boycott campaign targeting Pillsbury products soon afterwards.

Some Pillsbury family members also called for the company to pull out of the venture.

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By GlobalData

The brief General Mills statement avoided mention of such controversy and talked instead about its strategy which it said now involves increasing its focus on “advantaged global platforms”, which include Mexican food, super-premium ice cream and snack bars.

“The divestiture follows our earlier announcement of the proposed sale of our European dough business,” it said.

In comments carried by US and Israel media outlets, a General Mills spokesperson denied the company was pulling out of Israel entirely

“We will continue to sell our products in Israel and look forward to continuing to serve Israeli consumers with our other brands,” the spokesperson said.

Stressing the divestment was solely a business decision, the company added: “We have made clear the global business strategy that drove this decision. Any claims by others taking credit for this decision are false.”

Last year, Unilever-owned ice-cream manufacturer Ben & Jerry’s announced it would no longer sell its products in what it called “occupied Palestinian territory”, leading to calls for a boycott of its products from pro-Israel groups.

General Mills struck deals to sell its European Yoplait and dough businesses last year. The UK regulator is scrutinising the planned sale of the dough assets.

Last month, the company divested its US boxed meals portfolio, including the Helper and Suddenly Salad brands. It also announced the acquisition of US pizza-crust business TNT Crust.