Rapper Sean Combs, widely recognized as Diddy, has leveled accusations against alcoholic beverage conglomerate Diageo, claiming that they violated the terms of their business partnership and neglected the jointly acquired tequila brand, DeLeon Tequila, due to racial discrimination.
In a legal complaint filed in New York, Diddy alleged that Diageo had invested in competing brands while withholding the same level of support from DeLeon Tequila. Additionally, he claimed that Diageo deliberately limited the distribution of the product to “urban” neighborhoods.
Diageo has refuted these allegations and asserted its intention to vigorously defend itself against the claims.
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“This is a business dispute, and we are saddened that Mr. Combs has chosen to recast this matter as anything other than that,” a spokesman for the company said in a statement.
“Our steadfast commitment to diversity within our company and the communities we serve is something we take very seriously.”
The legal action follows several years of collaboration between Diageo, a UK-based company renowned for brands like Johnnie Walker, Guinness, and Tanqueray, and Sean Combs, who gained fame as a music executive and rapper in the 1990s and subsequently ventured into acting and other business endeavors.
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In 2007, Diageo approached Combs to assist in the promotion of their Ciroc vodka, leading to a successful partnership. In 2013, they jointly acquired DeLeon Tequila. However, the complaint filed by Combs’ company, Combs Wines & Spirits, alleged that Diageo failed to fulfill its obligations regarding distribution, investment, and brand positioning for DeLeon Tequila, falling short of their agreed-upon commitments.
Moreover, Combs’ legal team argued that there was a recurrent pattern of “racial typecasting,” citing previous disputes between Diageo and other black business partners.
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“This case is not an ordinary contract dispute in which a party chooses to disregard its contractual promises due to greed and profit,” the firm said in the filing.
“Rather, and similar to the realities experienced by many people of colour in the United States, Diageo’s treatment of its business relationship with Mr Combs was tainted by racial prejudices.”
The lawsuit cites a 2019 conversation in which a Diageo executive allegedly said Mr Combs’s brands would be more widespread had he been “Martha Stewart”, among other decisions.
The DeLeon brand is also currently sold in less than 4% of possible outlets compared with more than a third for Diageo’s competing Casamigos and Don Julio tequilas, the complaint said.
Despite being repeatedly confronted over the issues, Diageo failed to repair the situation, Combs Wine & Spirits alleged.
It said Mr. Combs intends to take separate legal action to request billions of dollars in damages and has asked the court to order the firm to “provide the equal treatment that it has contractually promised”.
Diaego said it was “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”.
“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 said.
“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.“