Booze Giant Diageo Slams Diddy’s Racism Accusations, Calls Lawsuit Over Tequila Brand A ‘Sham’

Lawyers for alcohol giant Diageo are demanding that a judge toss out a lawsuit from Sean “Diddy” Combs that accuses the company of racism, calling it “false and reckless” and driven by an effort to “extract additional billions” from the company.

Combs sued in May, claiming Diageo breached his partnership deal for DeLeon Tequila by failing to properly support the brand. But he went a lot further than that, also leveling accusations of racism and claiming Diageo had treated his product line “worse than others because he is Black.”

In the company’s first response to the lawsuit on Tuesday (June 27), Diageo’s lawyers didn’t exactly hold back, either. They called the Diddy’s lawsuit a “bad faith, sham action” filed by a star who had “amassed nearly one billion dollars” from their partnership but now wanted to “extract” billions more.

“These allegations 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,” the company’s attorneys wrote. “Diageo categorically denies these accusations.”

In a statement on Tuesday, a spokeswoman for Diageo echoed the message of the company’s legal filing — and said Diageo had permanently cut ties with the rapper.

“Mr. Combs’ bad-faith actions have clearly breached his contracts and left us no choice but to move to dismiss his baseless complaint and end our business relationship,” the company wrote. “Mr. Combs has repeatedly undermined our partnerships and threatened to publicly defame Diageo if we did not meet his unreasonable financial demands.”

In his lawsuit, filed on May 31, attorneys for Diddy’s Combs Wines and Spirits claimed that Diageo had “typecast” his DeLeon as a “Black brand” that could only be sold to “urban” consumers, harming its sales and leaving it lagging behind competing Diageo brands like Casamigos and Don Julio.

“Cloaking itself in the language of diversity and equality is good for Diageo’s business, but it is a lie,” Combs’ lawyers wrote. “While Diageo may conspicuously include images of its Black partners in advertising materials and press releases, its words only provide the illusion of inclusion.”

But in Tuesday’s response, Diageo said those bombastic allegations were just a distraction from a run-of-the-mill business dispute that should have been handled under a binding arbitration agreement that both sides signed. They asked the judge to either dismiss the case or order that it be resolved through that private arbitration process.

“Without its inflammatory rhetoric and false accusations, the complaint is nothing but a garden-variety, and eminently arbitrable, suit alleging breach of contract,” Diageo wrote.

And when it comes to that “garden variety” business dispute, Diageo says it was Combs who was clearly in the wrong. The company claims he was “an unreliable and untrustworthy business partner” who failed to provide sufficient support to help DeLeon thrive, while Diageo supplied over $100 million for the project.

“Unwilling or unable to provide funding for the mutual benefit of the parties and the DeLeón brand, in mid-2020 Combs began to issue threats to damage the brand and defame Diageo and its executives and employees by publicly claiming that DeLeón’s failure to thrive was due to a racial animus against him,” Diageo’s lawyers wrote.

In a statement to Billboard on Tuesday, Combs’ attorney John C. Hueston​ sharply criticized Diageo’s claims that it was terminating its partnership with the star, saying it was akin to “firing a whistleblower who calls out racism.”

“Over the years, he has repeatedly raised concerns as senior executives uttered racially insensitive comments and made biased decisions based on that point of view,” Hueston said. “Diageo even acknowledged the problem by agreeing in his contract to treat DeLeon the same way it treated their other tequila brands. He brought the lawsuit to force them to live up to that contract, and instead they respond by trying to get rid of him. This lawsuit and Mr. Combs are not going away.”