Don’t expect Sean “Diddy” Combs to be toasting his deal with liquor company Diageo any time soon.
He’s suing his British wine and spirits partner Diageo for racial discrimination, claiming the company has typecast the Combs Wines and Spirits brand as an urban product while marketing other similar products to a mainstream market.
Diddy says he’s not happy with Diageo and its executives. The lawsuit claims they have “put their feet on the neck of Mr. Combs’ brands.”
The rapper and mogul filed the lawsuit on May 31 in New York State Supreme Court in Manhattan against Diageo’s North American operations, The Wall Street Journal reported.
Diddy’s lawsuit wants Diageo to be forced to comply with a 2013 joint-venture agreement and other agreements signed between the two parties.
Diageo says things are fine between the two and rejects Diddy’s complaints.
“For more than 15 years, we’ve had a productive and mutually beneficial relationship with Mr. Combs on various business ventures, making significant investments that have resulted in financial success for all involved,” the company spokesperson said.
“We are disappointed our efforts to resolve this business dispute amicably have been ignored, and that Mr. Combs has chosen to damage a productive and valued partnership.”
The spokesperson added: “While we respect Mr. Combs as an artist and entrepreneur, his allegations lack merit, and we are confident the facts will show that he has been treated fairly.”
Diageo and Diddy teamed up in 2007 to promote Diageo’s Cîroc vodka brand. Combs led the brand’s strategic marketing and worked with Diageo to create new Cîroc products.
Following their success, Diageo and Diddy jointly purchased a small tequila brand, DeLeón, on a 50/50 basis in 2013, at a time when tequila was gaining popularity in the United States.
At the time of their purchase, DeLeón was only sold in a handful of Hollywood bars for more than $1,000 a bottle. Today, it is commonly sold in a variety of affordable and luxurious price points, sometimes selling in retail stores for between $40 and $60 a bottle.
Diddy Doesn’t like Diageo’s Marketing Strategy
However, Diddy claims DeLeón was ignored by Diageo while another celebrity-backed tequila product Casamigos, which was founded by George Clooney, was promoted. The difference, Diddy said, is Casamigos is white founded..
Casamigos was purchased by Diageo in 2017 for $1 billion, and since 2022 it has become the No. 1 tequila brand in the U.S., accounting for 12.6 percent of tequila sales in U.S. retail stores. Don Julio is another Diageo tequila product, and it holds the spot for the No. 3 brand.
In distant No. 28, representing just 0.4 percent of tequila sales, is DeLeón. Diddy blames its poor performance on Diageo marketing it as part of a “Black brand.”
Combs charges that Diageo “sabotaged” his DeLeon brand tequila with substandard packaging that “made the product look cheap,” according to The Wall Street Journal.
The Guardian reported that in 2019 Diageo executive Stephen Rust had told Diddy race was a contributing factor as to why the company had limited its distribution of DeLeón and Cîroc, stating that if Diddy was white like Martha Stewart, Diageo would have supported his brands to the fullest and not just Black consumers, according to the court filing.
“Some within Diageo’s leadership resented him for making too much money,” the court filing stated. Rust “also admitted that Mr. Combs’ race was part of the reason Diageo limited the neighborhoods where the Combs brands were distributed. If Mr. Combs were ‘Martha Stewart’, Mr. Rust said, things would be different.”