Diageo sued for ‘100% agave’ claim

A recent class action lawsuit has been filed against Diageo North America, accusing the company of deceptive marketing practices related to its Tequila brands. The lawsuit targets two of Diageo’s most popular Tequila brands, Don Julio and Casamigos. The lawsuit was filed by consumers Avi Pusateri and Chaim Mishulovin, along with Japanese-inspired restaurant Sushi Tokyo, in the US District Court of the Eastern District of New York.

Avi Pusateri, a resident of New York, owns and operates the Jazz Age Cocktails mixology group, while Chaim Mishulovin is a resident of New Jersey. Both consumers, as well as the restaurant, allege that they purchased bottles of Tequilas produced by Diageo, specifically Casamigos and Don Julio. They claim that despite paying premium prices for these products, they did not receive the quality they expected. The lawsuit argues that Diageo has engaged in false advertising by marketing its Tequila brands as “100% agave,” when in reality, the products contain significant concentrations of cane or other types of alcohol.

The plaintiffs assert that had they known the true ingredients of the Tequilas they purchased, they would not have bought them or would have been willing to pay less. The lawsuit alleges that both Don Julio and Casamigos fail to meet the regulatory requirements in the US and Mexico to be labeled as “100% agave.” As a result, the lawsuit seeks class action status for purchasers in New York and New Jersey, damages totaling more than US$5 million, and an injunction to prevent further false advertising by Diageo.

The lawsuit highlights the labeling of Casamigos and Don Julio bottles, which prominently display “100% agave” claims. The George Clooney-founded Casamigos brand was the fourth-largest selling Tequila worldwide in 2023, while Don Julio ranked as the second-largest brand, following Jose Cuervo. The Consejo Regulador del Tequila (CRT), the regulatory body for Tequila, oversees the Tequila NOM system, which ensures that Tequila brands are not adulterated during production. The lawsuit references concerns over the lack of regulatory oversight in the Tequila industry, with reports suggesting that some Tequila corporations mix cane or corn alcohol into their products.

In response to the lawsuit, a spokesperson from Diageo dismissed the claims as “meritless” and expressed the company’s intention to defend itself vigorously in court. Transparency around additives in the Tequila industry has been a contentious issue, with other producers, such as Bacardi, engaging in discussions with regulators to address the topic openly. The CRT has taken legal action against groups like the Additive Free Alliance (AFA), which have raised concerns about additives in Tequila production.