Liquor & Spirits
Diageo Faces Lawsuit Over Allegedly Misleading Tequila Labels
One of the world’s largest spirits companies, Diageo, is facing a lawsuit in the United States for allegedly deceiving customers about the authenticity of two of its most popular tequila brands — Casamigos and Don Julio. Filed on May 6 in a federal court in Brooklyn, the proposed class action accuses Diageo of falsely marketing these products as “100% agave” while allegedly containing other types of alcohol.
The lawsuit, brought by a group of consumers and a restaurant, claims that bottles labeled as “Tequila 100% Agave Azul” (Casamigos) and “100% de Agave” (Don Julio) actually include “significant concentrations of cane or other alcohols,” which would violate both U.S. and Mexican labeling regulations. Under these standards, only spirits made exclusively from Blue Weber Agave can be labelled “100% agave.”
What the Lawsuit Alleges
According to the complaint, Diageo’s labelling practices mislead customers into paying a premium for what they believe to be high-quality tequila. “Consumers reasonably believe they are paying for an authentic product,” said Steve Berman, one of the lead attorneys for the plaintiffs. “Instead, they’re being duped.”
The plaintiffs argue that if consumers had known the tequila was not truly made from 100% agave, they may have chosen a different brand or expected to pay less. Spirits that do not meet the “100% agave” standard are typically categorised as “mixto” tequilas, which blend agave with other sugars and are often considered lower in quality.
The lawsuit is seeking more than $5 million in damages, class action status for New York and New Jersey customers, and a court order prohibiting further deceptive marketing by Diageo.
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Diageo Responds
Diageo has denied the allegations, stating that “the claims are meritless” and vowing to “vigorously defend” itself in court. The company, headquartered in London, is the global powerhouse behind some of the most iconic spirits brands, including Johnnie Walker, Guinness, and Baileys, as well as its fast-growing tequila portfolio.
Both Casamigos, co-founded by actor George Clooney and Don Julio, have become leading names in the U.S. tequila market, contributing significantly to Diageo’s billion-dollar revenues from North America.
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Why This Matters
The case raises broader questions about truth in alcohol labelling and consumer transparency. Premium tequilas labelled “100% agave” typically carry a higher price tag, justified by the long and labour-intensive cultivation process of the Blue Weber Agave plant, which can take 7 to 10 years to mature. If these products are found to include other alcohols, it could have widespread implications for both industry practices and consumer trust.
The outcome of Avi Pusateri et al v. Diageo North America could also influence how tequila and other spirits are regulated and marketed in the U.S., especially as the demand for premium and craft liquors continues to rise.
Diageo has not yet made a formal court appearance, and the case is still in its early stages. But with public interest in product integrity growing, this lawsuit could prove to be more than just a legal skirmish—it may shape the standards of the spirits industry.
