Rapper turned mogul Sean “Diddy” Combs has been dumped by longtime business partner Diageo, with the drinks giant accusing him of using threats and acting in bad faith to get his own way.
Diageo North America first said it was breaking off its business relationship with Combs on Tuesday, weeks after the musician filed a lawsuit alleging the firm had racially discriminated against and neglected his vodka and tequila brands.
In 2014, Combs and Diageo entered a joint venture to buy high-end tequila brand DeLeón, with each party owning 50% of the “ultra-premium” drink. Some varieties of DeLeón can cost in excess of $1,000 per bottle.
Combs’s working relationship with Diageo had begun seven years prior, when the rapper helped the company promote its Cîroc vodka brand. By the time the two parties entered into their joint venture, Combs had reportedly helped lift Cîroc sales 40-fold.
In a statement emailed to Fortune on Wednesday, a Diageo spokesperson said the company had chosen to part ways with Combs for several reasons, including that he had “repeatedly undermined our partnerships” and “threatened to publicly defame Diageo if we did not meet his unreasonable financial demands.”
“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,” the firm’s representative said. “Mr. Combs’s 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.”
They added that following Combs’s lawsuit against Diageo, the company sees “no other path forward.”
“We have exhausted every reasonable remedy,” they said.
The company insisted that it “believes strongly” in the Cîroc and DeLeón brands and added that it had “tried for years to salvage the broken relationship with Mr. Combs.”
“We funded the purchase of DeLeón for the joint venture and proceeded to invest more than $100 million to grow the brand,” Diageo’s spokesperson said.
The spokesperson also claimed that Combs has made “nearly a billion dollars over the course of [the] 15-year relationship” but has contributed just $1,000 to the venture, refusing to honor any further commitments.
Combs’s attorney, John C. Hueston, said in an emailed statement that Diageo’s attempt to end its deals with his client was “like firing a whistleblower who calls out racism”—and insisted that “this lawsuit and Mr. Combs are not going away.”
“Over the years, he has repeatedly raised concerns as senior executives uttered racially insensitive comments and made biased decisions based on that point of view,” Hueston said. “Diageo even acknowledged the problem by agreeing in his contract to treat DeLeón the same way it treated their other tequila brands. He brought the lawsuit to force them to live up to that contract, and instead they respond by trying to get rid of him.”
Meanwhile, Tarik Brooks, president of Combs Global—the company that oversees Combs’s business portfolio—said Combs would “always fight to be treated fairly.”
“It’s absurd for Diageo to suggest that a Black person should be quiet and accept racism or discrimination because they earned a lot of money,” Brooks said in a statement. “Sean Combs is a spirits pioneer who has accomplished historic success with Cîroc.”
Racism allegations
In his legal action against Diageo, Combs accused the firm—which owns a slew of brands including Johnnie Walker, Guinness, and Smirnoff—of being “unwilling to treat its Black partners equally.”
“Rather than equal treatment, Diageo has treated Mr. Combs and his brands worse than others because he is Black,” Combs’s lawyers said in the legal filing earlier this month. “Diageo has typecast Cîroc and DeLeón, apparently deciding they are ‘Black brands’ that should be targeted only to ‘urban’ consumers.”
They added that Combs planned to seek “billions of dollars in damages due to Diageo’s neglect and breaches” in a separate lawsuit.
Last year, Combs became hip hop’s third billionaire, thanks in part to his deals with Diageo.
