Diageo drops Diddy after ‘sham’ lawsuit

Leading spirits firm Diageo has severed ties with Sean ‘Diddy’ Combs after the rapper sued the company.

Combs filed a lawsuit against Diageo in May this year, accusing the Johnnie Walker owner of allegedly neglecting their co-owned DeLeón Tequila brand because of his race.

Diageo, which co-owns DeLeón Tequila with Combs, has filed a response in relation to the lawsuit brought forward by Combs Wines and Spirits.

Diageo claims Combs made US$1 billion over the last 15 years from the Cîroc and DeLeón brands, while investing only US$1,000 compared with Diageo’s US$100 million investment.

It said Combs’ accusations were false and defamatory, and were made to extract money from Diageo.

Diageo’s court filing called Combs’ lawsuit claims a ‘sham’. The filing said: “Indeed, CWS’s [Combs Wines and Spirits] concession in paragraph five of the complaint that ‘Mr Combs intends to seek billions of dollars in damages due to Diageo’s neglect and breaches’ lays bare that money is really at issue, and the ‘complaint for injunctive relief’ a sham.”

A Diageo spokesperson commented: “We are saddened that Mr Combs has chosen to recast a business dispute as anything other than that and chosen to damage a productive and valued partnership.

“Mr Combs’ bad-faith actions have clearly breached his contracts and left us no choice but to move to dismiss his baseless complaint and end our business relationship.

“Mr Combs has repeatedly undermined our partnerships and threatened to publicly defame Diageo if we did not meet his unreasonable financial demands.

“Diageo believes strongly in the Cîroc and DeLeón brands and remains committed to their success, which is why we tried for years to salvage the broken relationship with Mr Combs.

“We funded the purchase of DeLeón for the joint venture and proceeded to invest more than US$100 million to grow the brand. Despite having made nearly a billion dollars over the course of our 15-year relationship, Mr Combs contributed a total of US$1,000 and refused to honour his commitments.

“We have exhausted every reasonable remedy and see no other path forward.”

Joint venture: Diageo and Combs

Diageo and Combs first started working together in 2007, when the pair entered into a marketing services agreement for the brand management of Cîroc vodka. Diageo said Combs has earned almost US$1bn for his services as a paid marketer and brand ambassador over the years.

In 2013, Diageo and Combs formed a joint venture to acquire DeLeón Tequila from a third party.

Combs took a 50% share in the brand, but ‘repeatedly and continually refused to provide any funding to help DeLeón grow’, Diageo claimed in its court filing.

The drinks firm alleged Combs has only put forward his initial US$1,000 capital contribution, while Diageo has provided 100% of the funding, equal to more than US$100,000.

Combs’ allegations

The rapper’s lawyers claimed Diageo and its executives have ‘put their feet on the neck of Mr Combs’ brands’, stunting production, distribution and sales of Cîroc vodka and DeLeón Tequila.

Combs’ filing alleged: “Rather than equal treatment, Diageo has treated Mr Combs and his brands worse than others because he is Black. Diageo has typecast Cîroc and DeLeón, apparently deciding they are ‘Black brands’ that should be targeted only to ‘urban’ consumers.”

The complaint draws direct comparisons with Diageo’s other Tequila brands, including actor George Clooney’s Tequila brand Casamigos, which the firm bought in 2017 for US$1bn.

It noted that the DeLeón brand was currently sold in less than 4% of possible outlets compared with more than a third for Casamigos and Don Julio Tequilas.