Diageo countersues Diddy alleging extortion

Following claims of racial discrimination by Sean ‘Diddy’ Combs, Diageo has countersued the rapper, alleging he has ‘leveraged’ allegations of racial animus to extort the firm.

The rapper sued the Johnnie Walker owner in May for allegedly neglecting their co-owned Tequila brand DeLeón because of his race.

Combs and Diageo announced an equal partnership to buy ‘ultra-premium’ DeLeón Tequila in 2014, however in the court filing submitted on Thursday (28 September), Diageo claimed that Combs did not hold up his end of the bargain, alleging that the company ‘funnelled’ more than US$100 million into the venture, while Combs contributed US$1,000 and a promissory note — all while “demanding for himself the title and benefits of equity ownership”.

The countersuit read: “In May 2021, following Diageo’s public commitment of US$100m to help with Covid recovery for the hospitality sector and underprivileged communities, Mr Combs demanded that Diageo pay him US$100m and threatened then to ‘reach out to every news outlet’ to ‘burn the house down’ and cause maximum damage to Diageo and the DeLeón brand, by making public accusations [of] racism if Diageo refused to write the check.

“At bottom, [Combs Wines’] baseless allegations are nothing more than a poorly veiled attempt to weaponise public accusations of racism in order to line Mr Combs’ pockets even further,” Diageo said.

Furthermore, the spirits company said it has paid Combs and his wholly owned companies nearly US$1 billion since 2007 — while Combs weaponised claims of racial animus to extract even more money from Diageo.

In addition, Diageo has accused Combs of showing little interest in the firm’s own commitment to diversity and equity, with the lawsuit claiming: “When invited to join Diageo’s diversity initiatives, including the Pronghorn initiative and providing financial support for Historically Black Colleges and Universities, Mr Combs declined to participate, and in fact tried to discourage Diageo from working with other African-American business people or influencers on the Pronghorn initiative.”

Combs’ lawyers deny all allegations and insist the company failed to support his DeLéon Tequila brand, claiming that in comparison to ‘more popular’ Tequila brands in Diageo’s portfolio, DeLéon only received distribution of 3.3% in retail liquor stores, compared to 36% for Don Julio.

Furthermore, Combs claims that George Clooney’s Casamigos brand received enough distribution to account for just under 13% of all Tequila sales across the country.

However, following the release of Diageo’s full-year 2023 financial results in August, CEO Debra Crew noted that DeLéon Tequila “has performed very, very well this year”, and while on a smaller base, the brand has had “higher growth rates on a percentage basis than Casamigos and Don Julio”.

In the filing, Diageo added that “if anything, DeLeón has received disproportionately favourable treatment and disproportionately greater resources from Diageo, far more than its other Tequila brands.”

In a statement released on Friday, Combs’ lawyer explained that Diageo “never truly listened to what Mr Combs was saying” when expressing concerns about race and diversity issues, and instead “brushed them off as threats and demands for money”.

“If they had actually taken the time to comprehend his concerns, and lived up to the agreements they signed, we wouldn’t be in court today.”

The countersuit comes after Diageo lost its bid to send Combs’ allegations to arbitration.