Beverage company Diageo ends business relationship with Sean ‘Diddy’ Combs
Combs accused the company of unfair treatment of his liquor, as well as racism
Diageo has moved to put an end to the over decade-long business relationship it has with Sean "Diddy" Combs – the latest development in the ongoing legal conflict between the spirits company and the rapper.
The company told the New York County Supreme Court on Tuesday it sent Combs a notice of termination in connection to the Ciroc vodka relationship it has had with him for roughly 15 years.
It did so in a filing to support a motion requesting to either compel arbitration or toss out Combs’ lawsuit claiming unfair treatment of his liquor and racism, things the company has strongly denied.
In the filing, Diageo also said it given the rapper a "notice of intent to arbitrate material breaches of the DeLeon agreement." DeLeon refers to the tequila brand that Combs and Diageo have together as part of a joint venture.
FILE - Music mogul and entrepreneur Sean "Diddy" Combs arrives at the Billboard Music Awards in Las Vegas on May 15, 2022. Combs is suing Diageo, saying the spirits company didn't make promised investments in his vodka and tequila brands and treated (Jordan Strauss/Invision/AP, File / AP Newsroom)
Combs sued Diageo on claims the company treated Combs and his brands "worse than others because he is Black," alleging it "typecasted Ciroc and DeLeon, apparently deciding they are ‘Black brands’ that should be targeted only to ‘urban’ consumers." Diageo also "began investing more heavily in other brands," something that made DeLeon suffer, his suit also purported.
"We are saddened that Mr. Combs has chosen to recast a business dispute as anything other than that and chosen to damage a productive and valued partnership," a Diageo spokesperson told FOX Business on Wednesday. "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."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DEO | DIAGEO PLC | 118.24 | -1.20 | -1.00% |
Diageo plc
Diageo’s move to sever the partnership "is like firing a whistleblower who calls out racism," Combs’ attorney John C. Hueston said in a statement to FOX Business.
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"Over the years, [Combs] has repeatedly raised concerns as senior executives uttered racially insensitive comments and made biased decisions based on that point of view," Hueston argued. "He brought the lawsuit to force them to live up to that contract, and instead they respond by trying to get rid of him."
Sean Combs attends Sean Combs 50th Birthday Bash presented by Ciroc Vodka on December 14, 2019 in Los Angeles, California. (Kevin Mazur/Getty Images for Sean Combs / AP Newsroom)
Diageo claimed Tuesday that Combs and Combs Wines and Spirits failed to meet their duty to fund the DeLeon joint venture equally by only providing $1,000 for it, a small fraction compared to the over $100 million the spirits company said in the filing that it had put toward the project. The company’s spokesperson reiterated that claim in a statement to FOX Business, also alleging he had "repeatedly undermined our partnerships" and "threatened to publicly defame Diageo if we did not meet his unreasonable financial demands."
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"Mr. Combs has complied with his contractual obligations to funding," Hueston said. "Diageo partnered with him to use his widely-known name and likeness to promote DeLeon."
In addition to Ciroc and DeLeon, some of the brands under Diageo are Smirnoff, Guinness, Casamigos, Captain Morgan and Tanqueray. The company’s market capitalization was around $94.17 billion as of Wednesday afternoon.