The dispute between Sean ‘Diddy’ Combs and Diageo deepens as the court reveals business details
Rapper, producer and entrepreneur Sean “Diddy” Combs is asking the New York Supreme Court to enforce a 2021 agreement that would require liquor retailer Diageo to treat its DeLeon tequila brand “at least as favorably” as its other tequila brands to notice.
Combs signed an agreement with Diageo – which owns more than 200 brands, including Guinness beer and Tanqueray gin – after what he says were years of neglect for DeLeon, a brand he founded with the London company in 2013.
Combs’ lawsuit against Diageo was submitted in May. But many details, including the 2021 agreement, were redacted at the time. Those details were released on Wednesday after Judge Joel Cohen ruled that Diageo could keep only limited parts confidential.
Combs says Diageo’s treatment of DeLeon worsened after it bought two competing tequila brands: Don Julio in 2014 and Casamigos in 2017. Combs, who is black, says Diageo positioned its tequila as an inferior “urban” brand and restricted distribution .
Diageo has denied Combs’ allegations. In late June, it asked the court to force arbitration or dismiss the lawsuit. It is also in the process of ending a partnership between Combs and Ciroc vodka, a brand he has promoted since 2007.
The new public documents detail what Combs said was Diageo’s repeated divestment of DeLeon. Last year, for example, DeLeon was distributed in 3% of possible outlets, while Don Julio was in 36%. DeLeon has been listed as “out of stock” at least 10 times in the past year in key markets, the lawsuit said.
In 2021, Combs said he was told that all of Diageo’s agave plants had been reassigned to other brands, forcing DeLeon to find suppliers in the more expensive spot market. Combs says Diageo also made unilateral decisions that hurt the brand, including discontinuing the popular 375-milliliter “half bottles” and launching a redesigned bottle with no marketing support.
Combs claims that Diageo’s decisions were often racist. He says he was adamant DeLeon wouldn’t offer flavored versions until customers had more time to learn more about the brand. But Diageo went ahead and developed a watermelon flavor, even though Combs had previously warned the company to be wary of the racist history and negative connotations associated with watermelon in brands targeting black consumers.
Combs says internal Diageo documents also suggest downplaying Ciroc’s connection to Combs with the goal of rolling back the “image of an African-American brand.”
In his own court documents, Diageo accuses Combs of resorting to “false and reckless” accusations in an attempt to seek monetary damages. Diageo also says DeLeon sales have doubled since the 2021 deal.
