Diddy is suing Diageo Spirits company for focusing too much on George Clooney’s Casamigos tequila and not enough on his own, calling the neglect racially motivated.
Sean “Diddy” Combs is suing Diageo, alleging that the spirits company has neglected his DeLeón tequila brand, which it co-owns, while pouring resources into two other tequila brands, including Casamigos, the George Clooney-backed brand that Diageo bought in 2017.
Diddy also accused Diageo of racial discrimination, alleging in his court filing that the company had described DeLeón as a “Black brand,” allegations which Diageo has denied.
“This is a business dispute, and we are saddened that Mr. Combs has chosen to recast this matter as anything other than that,” said a company spokeswoman. “Our steadfast commitment to diversity within our company and the communities we serve is something we take very seriously.”
Diddy’s Combs Wines and Spirits company filed the complaint on Wednesday in New York State Supreme Court in Manhattan. Combs is seeking a court injunction to compel Diageo to comply with their 2013 joint-venture agreement and subsequent written agreements between Combs and Diageo that were signed previously to resolve any complaints issued by Combs, according to the court filing.
For years, according to the filing, Combs has complained to the spirits company executives about their management of DeLeón. Among the issues he has raised include chronically out-of-stock products, a tiny distribution footprint, a “botched” redesign, and confusing changes related to pricing. Diddy also allegedly protested a decision by Diageo not to allocate available agave to DeLeón during a shortage of the ingredient in 2020 and 2021.
Combs and Diageo partnered in 2007 to develop the company’s Cîroc vodka brand. Combs became responsible for the brand’s strategic marketing and worked with the company on developing new products. Cîroc sales increased rapidly following the deal.
In 2013, when tequila was growing in popularity in the US, Combs and Diageo formed a joint venture to purchase DeLeón, then a little-known tequila brand sold in some Hollywood bars for more than $1,000 a bottle. While Diageo already had a stake in tequila brand Don Julio, within a few years, it would take complete control of that brand and add a third, Casamigos — the brand co-founded by George Clooney — to its portfolio.
According to Nielsen data analyzed by consulting firm Bump Williams, Casamigos is now the top-selling US tequila brand, accounting for 12.6% of tequila sales in US retail stores. Don Julio is number three on that list, with 12.1% of tequila sales. Meanwhile, DeLeón ranks 28th, representing 0.4% of tequila sales.
In retail stores, you can find DeLeón for between $40 and $60 a bottle nowadays, while Combs regularly promotes both it and Cîroc on Instagram. According to the court filing, DeLeón was distributed in 3.3% of retail outlets in 2022, compared with 36% for Don Julio and 34.4% for Casamigos.
Combs also alleges that in 2019, Diageo executive Stephen Rust told him that race was one of the reasons the company had limited its distribution of the Combs-backed spirits, telling him that if Combs were Martha Stewart, his brand would be distributed more broadly.
The same year, Diageo also introduced a redesigned DeLeón bottle with a label that “was prone to bubbling, which made the product look cheap,” according to the court filing. “The rebranded DeLeón product, unsurprisingly, did not take off.”
“DeLeón continues to be sabotaged by Diageo management and neglect,” Combs wrote to Diageo CEO Ivan Menezes in 2020, explaining that the company wasn’t treating Combs as a partner and that their unilateral decisions had damaged the brand.
“For more than 15 years, we’ve had a productive and mutually beneficial relationship with Mr. Combs on various business ventures, making significant investments that have resulted in financial success for all involved,” said the Diageo spokeswoman. “We are disappointed our efforts to resolve this business dispute amicably have been ignored and that Mr. Combs has chosen to damage a productive and valued partnership.”