Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Diageo has swapped a majority share of Cîroc vodka, one of the brands at the centre of a legal dispute with rap mogul Sean Combs, for a tequila brand backed by basketball star LeBron James.
The London-listed group on Monday said it had formed a joint venture with celebrity investor and advisory firm Main Street Advisors, with Diageo taking a majority stake in its tequila and mezcal brand Lobos 1707 in exchange for the rights to Cîroc in North America.
Diageo was reportedly looking to sell Cîroc following the termination of its partnership with Combs, who is also known as Diddy.
The rapper-turned-entrepreneur sued Diageo in 2023 for allegedly neglecting Cîroc and DeLeón, a tequila brand the two sides acquired in 2014, because of his race.
Diageo said at the time that Combs had failed to meet his promises to fund DeLeón and it had “tried for years to salvage the broken relationship”.
Last year the two parties settled the dispute just as it was about to proceed to a public trial. Combs has since been charged with sex trafficking. He denies the charges.
Main Street Advisors helps manage the fortunes of celebrities such as Arnold Schwarzenegger, Billy Eilish and James, who plays for the Los Angeles Lakers. James and his business manager, Maverick Carter, co-founded Lobos 1707 with actor Diego Osorio and Paul Wachter, chief executive of Main Street Advisors.
Diageo, which also counts Johnny Walker scotch and Guinness stout among its stable of brands, will keep the rights to Cîroc in the rest of the world.
Diageo’s North America chief Sally Grimes said: “The Main Street Advisors track record speaks for itself and together, we will establish a strong platform to unleash the full potential of the Cîroc brand for new generations and to drive the next phase of growth for Lobos 1707.”
Sales of Cîroc had plummeted in recent years. In 2024, its net sales slumped 26 per cent, making it the group’s worst performing key brand globally.
Diageo chief executive Debra Crew is under pressure to boost financial performance as the FTSE 100 company battles stagnant alcohol sales, amid a global slowdown in consumer spending and a growing trend for moderation.
Investors have called on Crew to set a clearer direction for the group, as they grow frustrated with promises of a recovery that is yet to materialise.
At its last trading update, in February, the drinks maker scrapped a long-standing sales growth target, blaming uncertainty over US tariffs and weak demand in important markets.
Diageo has been steadily offloading underperforming brands over the past year, including Venezuelan rum Pampero and Dutch liqueur Safari, as well as a number of its African brewing operations.
