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Diageo is ending its business relationship with Sean Combs, aka “Diddy”, after the businessman and rapper accused the drinks group of racism, a claim Diageo “categorically denies”.
In legal action filed last month by Coombs & Co., the rapper claimed that Diageo “stereotyped” the co-owned DeLeón tequila brand and Cîroc vodka, which he partnered with the company, as “black brands.” “, should be banned. For “urban” consumers.
In a response filed in New York court on Tuesday, the company said Coombs had made “false and reckless allegations, including numerous defamatory and demeaning allegations of racism against Diageo and certain of its senior executives.”
Koum “leaved us with no choice but to dismiss his baseless complaints and end our business relationship,” the company said in a statement.
Coombs claims that Diageo executive Stephen Rust told him in late 2019 that “if he was Martha Stewart, his brand would be wider”.
In the suit, he argues that Diageo is underinvesting in brands associated with the rapper, such as Casamigos Dragon, previously owned by actor George Clooney, compared with other brands the group owns. Quila (Casamigos tequila).
The latest filing intensifies the war of words between the two sides, setting the stage for a protracted legal battle in which Diageo seeks to dissolve its De Leon joint venture, calling Coombs an “unreliable and untrustworthy business partner”.
Diageo also accused Coombs, formerly known as P Diddy and Puff Daddy, of threatening the group with racist allegations to force the company to “agree to several outrageous extra-contractual demands, including alleged multi-billion dollar damages”.
In a Tuesday filing, the company said Combs had failed in his duties as a 50 percent shareholder, claiming he invested only $1,000, while Diageo put in more than $100 million. The rapper has made nearly $1 billion through their partnership, the company said.
This “created a contentious relationship that severely damaged the DeLeón brand at a critical time and stalled its promise and potential for growth for several years”.
Diageo this month announced the death of outgoing chief executive Ivan Menezes. Debra Crew has assumed this role, having previously run Diageo’s North American business.
Diageo and Combs first teamed up in 2007, when the drinks group hired him to promote and market its Cîroc vodka brand. The parties formed a joint venture in 2013 to acquire DeLeón Tequila.
In a lawsuit filed in Manhattan in late May, Combs alleges that the two brands have been lacking production, distribution and sales resources as other celebrity-backed brands have flourished.
Diageo’s Don Julio tequila is sold in 36% of its U.S. stores, compared with 34% for Casamigos, according to filings in May. Koum’s lawsuit said De Leon’s rate was 3 percent.
In response, Diageo said it had worked “over the years” to salvage its partnership with Coombs and remained committed to the success of the Cîroc and DeLeón brands.
The company described the allegations as an “opportunistic attempt to attract media attention.”
In response to Diageo’s decision, Coombs’ lawyers said the company’s “attempt to terminate its dealings with Mr. Coombs would be like firing a whistleblower who exposed racism.” is to divert attention from multiple allegations of discrimination. “
“Over the years, he has repeatedly raised concerns about racially insensitive remarks made by senior executives and has made biased decisions based on such views…,” they added. . The lawsuit and Mr. Coombs are not going away. ”