Diageo splits with Sean ‘Diddy’ Combs, calls lawsuit alleging racism a ‘sham action’

Spirits giant Diageo says it’s cutting ties with rapper and entrepreneur Sean “Diddy” Combs following his move to sue the company over allegations of racism in the handling of his liquor brands, according to a Tuesday court filing.

Combs’ lawsuit, filed with the New York Supreme Court in Manhattan last month, says Diageo North America starved Combs’ Cîroc vodka and DeLeón tequila brands of resources as it showered attention on other celebrity brands.

Combs, who is black, said Diageo leadership told him that his race was one of the reasons it limited distribution to “urban” neighborhoods and stunted sales growth of his brands. According to the suit, which seeks billions of dollars in damages in other legal proceedings against Diageo, Combs was also told that some Diageo leaders resented him for making too much money.

“Cloaking itself in the language of diversity and equality is good for Diageo’s business, but it is a lie,” reads the May 31 complaint filed on behalf of Combs Wines and Spirits LLC.

Meanwhile, Diageo has denied the accusations and called Combs’ suit a “sham action.” In Tuesday’s filing, which calls on the court to compel arbitration or dismiss Combs’ complaint, Diageo accuses Combs of resorting to “false and reckless” allegations “in an effort to extract additional billions” from the company.

Diageo also said it was ending its brand partnerships with the music mogul — noting that the company had served the Combs parties a notice of intent to arbitrate breaches of the DeLeón agreement and a notice of termination for their Cîroc relationship.

Combs’ relationship with Diageo dates to 2007, when the London-based company — which owns more than 200 brands, including Guinness beer and Tanqueray gin — approached Combs about Cîroc.

In Tuesday’s filing, Diageo said that Combs has acquired nearly $1 billion dollars throughout their 15-year relationship. The company also argues that Combs did not act as an equal partner by, for example, not providing adequate funding to help DeLeón grow — stating that, outside a $1,000 contribution from Combs, Diageo “provided 100% of the funding” for the joint venture, which amounted to a total investment of $100 million.

“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,” Diageo said in a Tuesday statement. “We have exhausted every reasonable remedy and see no other path forward.”

In a statement sent to The Associated Press on Tuesday, attorneys representing Combs Wines and Spirits said that Diageo’s attempts to end the partnership were “like firing a whistleblower who calls out racism.”

“It’s a cynical and transparent attempt to distract from multiple allegations of discrimination,” Combs’ attorneys said, adding that Combs “repeatedly raised concerns as senior executives uttered racially insensitive comments and made biased decisions” over the years. “He brought the lawsuit to force them to live up to that contract, and instead they respond by trying to get rid of him. This lawsuit and Mr. Combs are not going away.”