News Alert: Diageo Responds To Combs Lawsuit, Ends Relationship With Longtime Partner
June 28, 2023Diageo has fired back against longtime partner Sean “Diddy” Combs and his Combs Wine & Spirits company after the latter filed a complaint against the drinks giant in New York state court earlier this month. Diageo is requesting that the court either compel Combs Wine & Spirits to submit to binding arbitration or dismiss the complaint in its entirety, with prejudice.
In early June, Combs Wine & Spirits filed a lawsuit alleging that the spirits giant neglected to properly promote DeLeón Tequila and Cîroc vodka, two brands on which it has been partnered with Combs. The lawsuit alleges that Diageo pigeonholed the Combs brands, exclusively marketing them to black and “urban” consumers at the expense of the wider spirits market. Diageo responds that those claims are baseless, and that, “In an effort to extract additional billions from Diageo, Combs has resorted to false and reckless allegations, including numerous defamatory and disparaging accusations.”
“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,” said a Diageo spokesperson. “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.
The company continued, “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 $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 $1,000 and refused to honor his commitments. We have exhausted every reasonable remedy and see no other path forward.”
Cîroc remains the second-largest above-$25 vodka brand in the U.S. after Grey Goose at 1.4 million cases on a 4.5% decline in 2022, according to Impact Databank. DeLeón, meanwhile, posted 72% growth to 120,000 cases in the U.S. last year, but its growth has paled beside that of two other Diageo Tequila brands, Casamigos and Don Julio, both of which are above 2 million cases.—Daniel Marsteller
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