Diageos Larry Schwartz & Sean Diddy Combs seal the deal on DeLeon Tequila

Diageo's Larry Schwartz & Sean 'Diddy' Combs seal the deal on DeLeon Tequila

Diageo has upped its interest in the Tequila category through the acquisition of the DeLeón brand as part of a joint-venture agreement with rap artist and producer Sean 'Diddy' Combs.

In an announcement today (8 January), the drinks group said it has agreed a 50/50 global partnership with the 'Wine & Spirits' unit of Combs' business empire for the high-end brand. The deal, whose financial terms were not disclosed, builds on a tie-up between the company and musician on Cîroc vodka in 2007

DeLeón is a 100% blue weber agave Tequila, which has a "loyal following in Hollywood and the US music industry", according to Diageo.  

News of the deal first broke earlier this week, but reports did not mention Diageo's involvement.

The brand, currently distributed in 18 US states and Washington DC, has five variants with suggested retail prices ranging from US$120 to around $1,000.

DeLeon's current volumes are "less than 10,000 cases a year", a Diageo spokesperson told just-drinks. 

Larry Schwartz, Diageo's North America president said the acquisition is the "latest step towards returning to a leading position in Tequila in North America". The company relinquished its global distribution rights to Jose Cuervo last year as talks with its owners collapsed as Diageo sought to acquire the brand. Diageo's only other Tequila brand is Don Julio.

Schwartz added: “Expanding our relationship with Sean Combs into Tequila was a natural choice, given Sean’s ability to galvanise support for luxury brands, as we’ve seen with our work together on Cîroc.  

"Ultra-premium and above Tequila is a very exciting segment - we already have a strong brand there with Don Julio and are pleased to complement that offering with DeLeón.”

Brent Hocking, who established the DeLeón Tequila brand in 2008, said: "I am entrusting DeLeón Tequila to the capable hands of Diageo and Sean Combs as both have demonstrated a commitment to luxury and quality which reflects my own commitment to the DeLeón brand.”

Diageo said the JV will benefit the brand through its "strong distribution network, supply chain, and marketing capability".