“I think it’s too soon to say who will end up controlling the brands moving forward, as the legal proceedings will have to play out,” said Dan Marstellar, executive editor of Shanken News, a wine and spirits industry newsletter. “But Diageo certainly has the resources to try to retain and continue growing them if it wishes. The question is how much upside Diageo sees in them.”
Diageo’s response to the lawsuit alleged Combs had invested $1,000 into the DeLeon joint venture whereas Diageo devoted more than $100 million. “If Diageo wanted to keep the brand, I wonder if they would use that argument,” said Sarah Barrett, executive editor of Wine & Spirits Daily.
Ciroc remains the second-largest above-$25 vodka brand in the U.S. after Grey Goose, Marstellar said, citing Impact Databank figures. But the brand was down 4.5% last year and has averaged an annual 2.5% decline over the past five years. DeLeon posted 72% growth to 120,000 cases in the U.S. last year but grew slower than other Diageo-owned tequila brands, Casamigos and Don Julio, which each sold more than 2 million cases.
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