Diageo Prevails In NY Agave Class-Action Case
Diageo has beat back a challenge to its Tequila business, as Judge DeArcy Hall of the U.S. District Court, Eastern District of New York, granted the company’s motion to dismiss a class-action case alleging that its Don Julio and Casamigos brands are not 100% agave.
The decision has big implications for two of the largest-selling Tequilas in the U.S. market. According to Impact Databank, Don Julio had U.S. retail value of $2.7 billion to lead the U.S. spirits category last year, while Casamigos tallied just over a billion dollars in retail sales value, ranking fourth within Diageo’s U.S. portfolio after Don Julio, Crown Royal, and Smirnoff.
The court found the plaintiffs’ evidence insufficient to prove their allegation of widespread and systemic adulterations of the products, noting that the assertion rested on a single, small study. “[T]he Court struggles to find how it could find that a study that looks at five samples would allow a court to reasonably infer that a defendant was engaging in ubiquitous, systemic mislabeling,” the decision reads.
“We are gratified that the court rejected plaintiffs’ adulteration allegations in their entirety,” Diageo stated. “Casamigos and Don Julio are made from 100% Blue Weber agave. We’re proud of our Tequilas, confident in their quality and integrity, and pleased to put these baseless claims behind us.”
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