In a significant development, beverage giant Diageo has announced the termination of its 15-year partnership with Sean “Diddy” Combs, citing the music mogul’s racial discrimination lawsuit as the catalyst for their decision. Combs played a crucial role in revitalizing Diageo ‘s struggling Ciroc label as a brand ambassador and joint venture partner.
The move comes in response to Combs’ legal action against the British company, filed in June, which alleges racial discrimination. Combs claims that Diageo withheld promised investments from his vodka and tequila brands and limited their marketing efforts to only target ” urban “consumers. Diageo filed a court motion seeking to dismiss the case or move it into arbitration, making the announcement on Tuesday.
Attorney John Hueston, representing Shaw Combs, responded to Diageo’s decision, likening it to ‘firing a whistleblower who calls out racism.’ Hueston emphasized that Combs had raised concerns about racially insensitive comments and biased decisions within the company for years. He noted that Diageo acknowledged the issue by agreeing to treat Combs’ tequila brand, DeLeón, on par with its other tequila brands in their contract.
The partnership between Diageo and Combs began in 2007 when the company approached him to handle marketing and promotion for Ciroc through an equal-share joint venture. Combs alleges that despite his instrumental role in driving substantial growth for the Ciroc and DeLeón brands, Diageo failed to provide adequate resources, instead pigeonholing them as “black brands ” exclusively targeting urban consumers.
The lawsuit further claims that Diageo neglected its obligations under the agreement by producing lower quantities, limiting distribution, and reducing marketing efforts for DeLeón compared to other brands.
The complaint points out that in 2014, Diageo acquired the competing tequila brand Don Julio and committed $400 million to its growth. Three years later, the company invested $1 billion to acquire Casamigos. According to Combs, Diageo effectively abandoned DeLeón following these acquisitions, prioritizing other brands such as Casamigos, Aviation Gin, and Ketel One for broader market positioning.
In response to the lawsuit, Diageo maintains that its contract with Combs does not require equal treatment of his brands but rather “measured and proportionate treatment and support” for DeLeón, while considering the differences among the brands. The company asserts that Combs repeatedly undermined their partnership and made unreasonable financial demands, even threatening to publicly defame Diageo.
Diageo expressed efforts to salvage their relationship with Combs over the years, including funding the purchase of DeLeón for the joint venture and investing more than $100 million to grow the brand. Despite the substantial profits generated during their 15-year association, Combs allegedly contributed a mere $1,000 and failed to honor his commitments.
The termination of the partnership with Combs marks a significant turning point in the ongoing legal battle, prompting discussions about racial discrimination, contractual obligations, and the dynamics of brand partnerships within the industry.
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Written by:
Dana Sterling-Editor
