Liquor brand Diageo is refuting claims made by Sean “Diddy” Combs.
As AFROTECH previously reported, Combs sued Diageo as he believed the company was not providing DeLeón the same thought and care as its other tequila brands, including George Clooney’s Casamigos, which Diageo purchased for $1 billion in 2017.
“I just need the same 24 hours as y’all giving everybody else in your portfolio and I couldn’t get that,” Combs said in an interview with “Earn Your Leisure” at Invest Fest 2023. “I had to send my people down to Mexico. And this is just to tell you what the fight is about. They went down to Mexico and when they got down there, they found out that there was zero agave planted for DeLeón.”
He continued, “So there was no plan for us to be successful. It was no equal treatment. The other brands, they had agave planted, they had no agave planted for me.”
According to court documents shared with AFROTECH, Diageo suggests that they have provided substantial support for DeLeón, while Diddy has significantly failed to uphold his end of the joint venture (JV).
Diageo claims it has invested over $100 million into the JV, while Combs has only opened his checkbook to offer $1,000.
“Diageo has disproportionately supported and grown the DeLeón brand despite the Combs Parties’ repeated failures to live up to their own commitments and their repudiation of their bargained–for role as true equity partners,” court papers read. “That is why CWS will not prevail on the sole breach of contract claim brought here: it is contrary to every fact about the parties’ actual performance of their contractual obligations.”
It continued, “Those facts, some of which are set forth below, also show that the JV has not functioned as a true partnership because rather than prioritize and contribute meaningfully to the business, Mr. Combs has focused on one thing only: his own self–enrichment.”
Diageo also cites Diddy’s lack of equity in the partnership as a result of his failures “to take on any of the risks, burdens, and responsibilities that come with being a true equity owner and partner.”
It was expected that Combs would provide marketing, advertising, and promotional services.
“As a businessperson and entrepreneur, Mr. Combs clearly understood that the promissory note supporting his 50% equity ownership interest was not a gift from Diageo, and that he would be expected to honor his obligations and live up to his responsibilities as an equity owner,” court papers read. “Rather than deliver on those promises, which were the consideration for Diageo’s agreement to loan Mr. Combs the money to pay for his equity ownership interest in the JV, Mr. Combs and CWS simply refused to provide marketing, advertising, and promotional services unless they were directly paid additional sums to do so, including Mr. Combs’ full celebrity rate.”
Diageo also addressed Combs accusation of racial discrimination. He had mentioned that the liquor company wanted to box him in the “colored section” and only had plans to distribute his products in Black neighborhoods.
Diageo states the allegations are untrue and has countered his claims. The company claims the mogul “asked to be paid millions of dollars more under threat of publicly accusing Diageo of racism” and once demanded $100 million in the wake of COVID-19.
“In May 2021, following Diageo’s public commitment of $100 million to help with COVID recovery for the hospitality sector and underprivileged communities, Mr. Combs demanded that Diageo pay him $100 million 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,” an excerpt from the court filing read.
Furthermore, the company does acknowledge the disruption of DeLeón supply and states it was a result of the effects of the pandemic.
“Following the July 2020 reset, Mr. Combs and CWS nonetheless periodically accused Diageo of racism, citing supply disruption issues and occasional ‘stock-outs’ of DeLeón products as evidence of supposedly discriminatory treatment,” the company stated. “These disingenuous accusations ignored the incontrovertible fact that the COVID pandemic was impacting every part of the supply chain; indeed, the pandemic negatively affected supply for all of Diageo’s tequilas, as well as for its other brands and products.”
In response, Diddy’s attorney, John C. Hueston, shared the following statement with AFROTECH: “Diageo claims its executives were available to hear all of Mr. Combs concerns about race and diversity issues. The sad truth is that they never truly listened to what Mr. Combs was saying and 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.”