Diageo Hits Back In Tequila Class Action Case
Diageo was recently targeted by a class action lawsuit from plaintiffs who assert that Tequila brands Casamigos and Don Julio don’t live up to their billing as 100% agave spirits. In late May, Diageo’s president of U.S. Spirits, Stephen Rust, told SND in an interview that the claims against the company’s brands are unfounded and absurd.
Yesterday, Diageo filed its official response to the class action suit in the U.S. District Court for the Eastern District of New York. “These claims are without factual or legal merit,” said a Diageo spokesperson on yesterday’s filing. “The complaint fails to allege a single fact that comes close to supporting the baseless claim that Casamigos and Don Julio Tequilas are not 100% agave. All Casamigos and Don Julio Tequilas labeled as ‘100% agave’ are made from 100% Blue Weber agave. We will vigorously defend the quality and integrity of our Tequilas in court, and against anyone who is spreading misinformation and lies about our products.”
Diageo’s filing requests a pre-motion conference in advance of moving to dismiss the complaint. Don Julio leads the luxury Tequila market in the U.S. with volume of 3.3 million cases, according to Impact Databank, while Casamigos ranks third in the luxury segment at just under 2 million cases.
The lawsuit was brought by consumers Avi Pusateri and Chaim Mishulovin and New York restaurant Sushi Tokyo. Based on private testing, it accuses Diageo of using lesser ingredients in its Tequilas while marketing them as 100% agave. The plaintiffs also cite unverified reports of lapses at Tequila’s regulatory body the CRT as allowing big brands to substitute cane and other types of alcohol for agave. They’re seeking $5 million in damages plus attorneys fees. A similar lawsuit was recently filed in the Northern District of California.
In its filing, Diageo’s lawyers contend that the New York complaint is “a scattershot narrative based entirely on unsupported and unverified speculation quoted in blogs and media reports. But none of the sources Plaintiffs cite even mentions Diageo, let alone implicates the company in any misconduct. Plaintiffs invoke regulatory standards but never allege how those standards were breached. They refer to unspecified testing but never say what was tested, how it was tested, or provide any comprehensible result of the alleged testing. They assert fraud without alleging, as they must, a single fact linking Diageo to any deceptive conduct. That approach may generate headlines, but it falls far short of a coherent or credible theory of wrongdoing, much less a viable legal claim.”
“This is a deliberate attempt to hurt our brands, hurt our people, hurt our industry,” Rust told SND in late May. “It’s fundamentally false and without merit.”
The class action suits have come amid a wider debate in the Tequila industry over the use of additives, which the Tequila Regulatory Council allows in amounts up to 1% of total liquid weight even in 100% agave brands. The issue has split some of the category’s top competitors, with Bacardi-owned Patrón launching rounds of ads highlighting its additive-free status, while others, such as Jose Cuervo marketer Proximo Spirits, have pointed to the use of additives across many spirits categories and asserted that the current additive-free narrative is misleading to consumers.—Daniel Marsteller
Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
Tagged : Bacardi, Casamigos, Diageo, Don Julio, Jose Cuervo, Patrón, Proximo
