Sean “Diddy” Combs claimed business partner Diageo neglected his tequila label — calling it “urban and a “black brand” — in favor of rival Casamigos after it paid $1 billion for the George Clooney-owned spirit, according to a lawsuit filed by the rap mogul Wednesday.
Combs alleged the spirits giant “sabotaged” his DeLeon brand tequila with shoddy packaging that “made the product look cheap,” in the complaint filed in New York State Supreme Court in Manhattan, according to The Wall Street Journal.
He also alleged that a Diageo executive told him in 2019 that race was one of the reasons the company had limited its distribution of DeLeón and his popular Ciroc vodka.
The exec told the rapper-turned-entrepreneur that if his company, Combs Wines and Spirits, were owned by Martha Stewart, his brands would be distributed more broadly, according to the court filing.
The same year, Diageo introduced a redesigned bottle with a label that “was prone to bubbling, which made the product look cheap,” according to the court filing. “The rebranded DeLeón product, unsurprisingly, did not take off.”
Combs took his complaints to Diageo boss Ivan Menezes.
“DeLeón continues to be sabotaged by Diageo management and neglect,” he wrote to chief executive Ivan Menezes in 2020, according to the court filing.
Menezes responded by telling Combs he was committed to resetting the relationship and thanked him for being the “key driver of the success of Cîroc” by being “a champion for the African-American people,” according to the court filing.
Diageo denied Combs’ allegations of racial discrimination or that it neglected the brand.
“This is a business dispute, and we are saddened that Mr. Combs has chosen to recast this matter as anything other than that,” a Diageo spokesperson told The Post.
“Our steadfast commitment to diversity within our company and the communities we serve is something we take very seriously.”
“We categorically deny the allegations that have been made and will vigorously defend ourselves in the appropriate forum,” the spokesperson added.
The Post has sought comment from Combs.
In 2007, Combs and Diageo teamed up to create Cîroc, which became a best-seller.
Six years later, the two sought to capitalize on the rising popularity of tequila and formed a joint venture which acquired DeLeón, a little-known brand that was being sold for $1,000 a bottle at some bars.
In 2017, Diageo agreed to pay up to $1 billion for Casamigos, the top-selling tequila brand fronted by Clooney and his business partner Rande Gerber.
Diageo’s portfolio also includes Don Julio.
The two brands made up nearly 25% of the $11.7 billion in tequila sales last year, according to industry sources cited by the Journal.
Meanwhile, DeLeon ranked 28th, representing 0.4% of tequila sales in 2022, the Journal reported.
Diddy alleged DeLeón has been chronically out of stock and has been hamstrung by a small distribution footprint, according to the complaint.
The complaint seeks to force Diageo to comply with a 2013 joint-venture agreement and other agreements signed between the two parties, according to the Journal.
“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 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.”
With Post wires
