Today (May 31), Sean “Diddy” Combs filed a lawsuit against Diageo, the multi-million-dollar spirits conglomerate and his partner for DeLeón Tequila. The mogul is accusing the company of racism, neglect and sabotage in both the distribution and production of his popular spirit.
Combs Wines and Spirits LLC filed this complaint in state Supreme Court in New York. It’s seeking injunctive relief from Diageo due to its inaction of making DeLeón Tequila as successful as its other tequila brands such as Don Julio and Casamigos — the latter of which Diageo purchased from founders George Clooney, Randy Gerber and Mike Meldman.
The suit highlights the discrepancies between the work Diageo has done behind these white-founded brands versus its actions for DeLeón Tequila. The complaint adds that Combs has experienced unequal treatment on numerous occasions even though his contract with Diageo mandates equality. On top of that, Diageo’s CEO Ivan Menezes has shown great reluctance to treating Black partners like Combs fairly, which appears as a complete contradiction to his commitment to diversity and equality.
The complaint states that Diageo views DeLeón Tequila as a brand that predominately targets Black consumers and they believe the spirit can only appeal to the “urban” community. The suit also claims that business partners and retailers have shared that Diageo positions DeLeón as an “ethnic brand.” The spirit isn’t even highlighted on Diageo’s “Our Brands” page on its website or any of its other press materials.
Furthermore, the complaint alleges that Diageo inadequately ramped up DeLeón Tequila’s production, which caused the popular DeLeón Reposado to be out of stock on a consistent basis. Plus, a Diageo executive even told Combs that things would be handled differently if he was “Martha Stewart.”
For Don Julio, Diageo agreed to spend $400 million to expand the business. For Casamigos, the conglomerate paid $1 billion to acquire it. However, Diageo bought both of these brands after they got DeLeón Tequila and it’s invested resources into the distribution and production of the two former brands while DeLeón Tequila constantly received the short end of the stick.
In 2007, Diageo reached out to Combs with the intent to create a new brand, which the mogul expressed interest in if the deal included ownership on his end. The businessman focused on CIROC, Diageo’s unknown vodka entity. As a result of his marketing, Combs turned CIROC into a successful, billion-dollar brand that went from 40,000 cases being sold to nearly 2,600,000 in years.
In 2013, with CIROC’s exponential rise, Combs teamed up with Diageo once again for DeLeón Tequila. Though the spirit still became a success, Diageo ineffectively supported DeLeón Tequila distribution and production efforts. Examples of this include running out of supplies needed for the consumer purchases as well as ignoring multiple opportunities to expand its sales. Due to this neglect, consumers had no choice but to buy other tequila brands such as Casamigos and Don Julio.
Diageo’s actions have effectively sabotaged DeLeon’s growth. For example, as of 2022, DeLeón Tequila was only being distributed in approximately 3.3 percent of all possible outlets, which is significantly lower than the distribution of Diageo’s other tequila brands, Casamigos and Don Julio, which were being distributed in 34.4 percent and 36 percent of all possible outlets, respectively.
In retail locations, DeLeón Tequila receives far fewer facings than Casamigos and Don Julio, as well. Furthermore, multiple retailers have confirmed that Diageo has not even contacted them for potential distribution of DeLeón Tequila.
In the past, Diageo received similar accusations of racial discrimination by other Black business partners. In 2013, Pharrell Williams sued the company for breach of contract and in 2022, Eboni Major, the first blender at a major distillery, accused Diageo of persistent racial hostility.