Bloomberg — Diageo North America Inc. said it is breaking off its business relationship with Sean “Diddy” Combs after the music mogul accused the world’s biggest spirits maker of racism in neglecting his liquor brands.
Diageo (DEO) made the announcement in a Tuesday court filing responding to Combs’s lawsuit last month, which accused the company of racial bias in failing to adequately promote his Ciroc Vodka and DeLeón Tequila brands. Diageo asked the judge in the case to force Combs’s claims into arbitration or dismiss the case.
“Diageo is profoundly disappointed that Sean Combs, an entertainer and entrepreneur who has amassed nearly one billion dollars from a fifteen-year relationship with Diageo, has caused this bad faith, sham action to be improperly brought before this Court,” Diageo said in the Manhattan federal court filing.
“Diageo attempting to end its deals with Mr. Combs is like firing a whistleblower who calls out racism,” his lawyer, John Hueston, said in a statement. “It’s a cynical and transparent attempt to distract from multiple allegations of discrimination.”
Combs claimed in his suit that Diageo paid lip service to promoting diversity in its business relationships while failing to adequately promote his brands. As evidence of bias, he pointed in his suit to the company’s $1 billion acquisition and marketing of the Casamigos tequila brand partly founded by actor George Clooney.
Diageo said in its court filing that it was Combs who failed to support his brands, putting only $1,000 into the joint venture while the company invested $100 million.
“The Combs parties’ failure to fund the JV created a contentious relationship, severely damaged the DeLeón brand at a critical juncture, and stalled its promise and potential for growth for several years,” Diageo said.
A Diageo spokesperson said the brands will continue to be sold while both sides fight over the end of their relationship.
The case is Combs Wines and Spirits LLC v. Diageo North America Inc., 652517/2023, New York State Supreme Court, New York County (Manhattan).
--With assistance from Dasha Afanasieva.