Diageo Alleges Diddy Demanded Millions, Threatened Racism Accusations For Payout

The case of Sean “Diddy” Combs versus spirits conglomerate Diageo has been full of back-and-forth accusations. In the latest round, Diageo claims Combs allegedly tried to coerce millions out of the company by threatening to call the company racist.

According to Rolling Stone, in response to Combs’ lawsuit alleging mistreatment and discrimination toward his vodka and tequila brands, Diageo has presented a detailed counterargument, asserting that it consistently offered support to DeLeón, which Combs shares with Diageo. Furthermore, Diageo contends that Combs demanded millions of dollars more, threatening to accuse the company of racism if that didn’t happen.

“For example, in May 2021, following Diageo’s public commitment of $100 million to help with COVID recovery for the hospitality sector and underprivileged communities, Mr. Combs demanded that Diageo pay him $100 million and threatened then to ‘reach out to every news outlet’ to ‘burn the house down’ and cause maximum damage to Diageo and the DeLeón brand, by making public accusations [of] racism if Diageo refused to write the check,” the liquor company’s response reads.

Combs’ lawyers deny the accusations and insist the conglomerate failed to support the DeLéon Tequila brand, which harmed its sales.

Furthermore, Diddy claimed that the company did this because it viewed DeLéon as a Black brand, lending the company less support than other brands.

Billboard reported on Sept. 8 that Combs won an early battle against Diageo, forcing the company out of arbitration into a public legal battle. The company claimed Combs was an “unreliable and untrustworthy business partner” who “repeatedly undermined our partnerships and threatened to publicly defame Diageo if we did not meet his unreasonable financial demands.”

As CNBC reported, in 2007, Combs Wines and Spirits began an equal partnership with Diageo to market and promote the vodka brand Ciroc. After this initial success, Diageo agreed to pursue a similar partnership deal regarding the DeLéon tequila brand in 2013. Combs alleges that a Diageo executive, Stephen Rust, informed him in 2019 that it would have received more of a push if Martha Stewart owned his company.

Diageo responded via a statement, “We are 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. 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.”

Compared to more popular tequila brands in Diageo’s portfolio, DeLéon only received distribution of 3.3% in retail liquor stores compared to 36% for Don Julio, Combs claims. Casamigos, the most popular tequila brand in America, received enough distribution to account for just under 13% of all tequila sales countrywide.

Combs’ lawyer briefly described what led his client to pursue litigation against Diageo in a statement released on Sept. 29.

“Diageo claims its executives were available to hear all of Mr. Combs’ concerns about race and diversity issues,” John Hueston said. “The sad truth is that they never truly listened to what Mr. Combs was saying and brushed them off as threats and demands for money. If they had actually taken the time to comprehend his concerns and lived up to the agreements they signed, we wouldn’t be in court today.”