Diageo’s 16-year partnership with Sean ‘Diddy’ Combs, which initially centred around the Cîroc vodka brand before growing to include DeLeón tequila, has ended in acrimonious circumstances.
The multinational brand owner was hit earlier this month by a lawsuit from the musician & entrepreneur’s Combs Wines & Spirits business that claimed Combs’ race had played a part in the strategy for DeLeón. The two sides had strengthened 2007’s brand management tie-up for Cîroc ten years ago, forming a joint venture to acquire the tequila.
In a memorandum response yesterday to Combs Wines & Spirits’ [CWS] legal filing with the Supreme Court of the state of New York, Diageo confirmed the termination of all business links with Combs. The allegations of racism, the company claims, are “nothing more than opportunistic attempts to garner press attention and distract the court from the fact that plaintiff’s breach-of-contract claim is entirely without merit”.
“Diageo categorically denies these accusations.”
The response also alleges that the DeLeón JV was funded by Diageo to the tune of “over US$100m” with CWS “investing a mere $1,000”. According to the Don Julio and Casamigos tequila brand owner, the partnership generated “nearly $1bn” for CWS over its 15 years.
“Combs has proven himself once and for all to be an unreliable and untrustworthy business partner,” Diageo said. “We have exhausted every reasonable remedy and see no other path forward.”
The group’s lawyers have asked the court to rule that CWS should be compelled to arbitrate on what it described earlier this month as a “business dispute”. Should the court decline the request, Diageo is pushing for the complaint to be dismissed.
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