Diddy believes that DeLeón, his tequila brand, deserves more backing, so he’s taking a stand.
As a part of its argument, DeLeón says it hasn’t received the same attention as brands like George Clooney’s Casamigos, which Diageo bought for $1 billion in 2017, and Don Julio, which it acquired in 2014.
It was stated in the court filing that DeLeón was distributed in only 3.3% of retail outlets while George Clooney’s Casamigos tequila was distributed in 34.4% in 2022.
“Diageo cannot even reasonably dispute that DeLeon has been treated less favorably than brands like Casamigos or Don Julio. Instead, Diageo claims that it is required only to provide DeLeon proportionally equal treatment. But it was Diageo that kneecapped DeLeon’s sales growth for nearly a decade and now says that, because DeLeon has not yet reached the same sales levels as competing brands Casamigos and Don Julio, Diageo need not provide it with the same scale support,” the lawsuit reads.
It continued, “Diageo’s self-fulfilling prophecy not only ignores Diageo’s legal obligations, but also ignores the growth that Mr. Combs and Combs Wine have recently won for DeLeon in the marketplace. Diageo will squander that hard-fought growth if it continues to treat DeLeon as a mere proportional priority.”
“Rather than equal treatment, Diageo has treated Mr. Combs and his brands worse than others because he is Black,” the filing reads. “Diageo has typecasted Ciroc and DeLeón, apparently deciding they are ‘Black brands’ that should be targeted only to ‘urban” consumers.’”
The complaint was filed in the New York State Supreme Court, Manhattan, NY, after Diddy allegedly experienced years of dissatisfaction with Diageo’s management, according to The Wall Street Journal. His complaints included out-of-stock products, confusing prices, and a mismanaged redesign.
“DeLeón continues to be sabotaged by Diageo management and neglect,” Combs wrote to Diageo CEO Ivan Menezes in 2020, per the court filing.
Diddy claims he has not been treated like a partner by Diageo. Therefore, he is looking for the company to follow through with their initial 2013 joint-venture agreement and additional written agreements that were inked over the years to resolve his complaints.
Prior to suing Diageo, Diddy announced a new platform that serves his spirits brands. According to Vibe, he launched Diddy Direct, a direct-to-consumer platform, for users “to quickly find their desired product.”
“This platform is a game-changer for the spirits industry, and we’re proud to offer consumers and retailers direct access to our portfolio of premium spirits,” Diddy shared in a statement. “With Diddy Direct, we’re setting a new standard for direct-to-retailer and direct-to-consumer experiences and bringing the best of Combs Spirits directly to anyone, anywhere in the country.”