Diageo faces lawsuit over alleged mislabelling of tequila brands

Nov - Food Bev - Website Banner - TIJ vs TTO 300x250.gif

Access more as a FoodBev subscriber

Sign up to FoodBev and unlock more insights from the international food and beverage industry. Subscribers have access to webinars, newsletters, publications and more...

Subscribe now >

Diageo is facing a lawsuit over claims that some of its top-selling tequilas are falsely marketed as “100% agave” despite allegedly containing other alcohols.

Filed in federal court on Monday 5 May, the lawsuit comes from a group of consumers and a restaurant, who allege that Diageo’s Casamigos and Don Julio brands mislead buyers with labelling that suggests the spirits are made entirely from blue agave. Casamigos bottles are marketed as “Tequila 100% Agave Azul,” while Don Julio is labelled “100% de Agave”.

According to the plaintiffs, independent testing revealed that the tequilas in question contained “significant concentrations of cane or other types of alcohol,” suggesting the spirits may not meet US or Mexican standards to qualify as “100% agave” tequila. They’re seeking over $5 million in damages and is also pushing for an injunction to stop Diageo from continuing the alleged misrepresentation.

According to the complaint, consumers behind the lawsuit argue they would have either chosen different products or paid less for Casamigos or Don Julio had they known the "100% agave" claims were not accurate.

Diageo strongly denies the accusations. In a statement reported by Reuters, the company said: “These claims are meritless and we plan to vigorously defend ourselves in court”.

Diageo states that all its tequila brands are certified by Mexico’s Consejo Regulador del Tequila (CRT) and that its product labels have been reviewed and approved by the US Alcohol and Tobacco Tax and Trade Bureau.

Under US and Mexican law, only spirits made entirely from Blue Weber agave sugars and produced in specific Mexican regions may be labelled “100% agave”. Tequilas that include fermentable sugars, typically up to 49% from sources like cane sugar, are categorised as 'mixto' tequilas and cannot carry that designation.

Diageo’s tequila portfolio is a major business: Casamigos, co-founded by American actor George Clooney, was the world’s fourth biggest-selling tequila in 2023, with 3 million nine-litre cases sold. Don Julio ranked second, with 3.4 million cases.