Federal Lawsuit Accuses Diageo of Adulterating Their Tequilas

Over the previous a number of years, the dialog round transparency in tequila has largely centered on using components and the exact language producers can use on their bottles to explain what’s been added—or not added—to the spirit inside. Nevertheless, this week, that dialog shifted to the purity of the agave spirit itself, as a category motion lawsuit filed in U.S. federal court docket accused international spirits large Diageo of adulterating a few of its hottest luxurious tequilas and deceptive shoppers by way of misleading labeling.

The class motion grievance filed within the U.S. District Courtroom for the Japanese District of New York alleges that “an investigation of Casamigos and Don Julio tequilas has proven that they consist of great concentrations of cane or different sorts of alcohol relatively than pure tequila.” 

As such, the grievance contends that neither model meets the regulatory necessities to label itself “100% agave” in both the USA or Mexico, though each Casamigos and Don Julio bottles carry the descriptors “Tequila 100% Agave Azul” and “100% de Agave,” respectively.

Within the submitting, the plaintiffs, which embrace a Brooklyn sushi restaurant and a New York-based bartender who runs a well-liked Instagram account, declare that they bought each Casamigos and Don Julio tequilas beneath the belief that each contained spirits made completely from Blue Weber agave. Furthermore, they and numerous shoppers like them paid a premium for what they believed to be high-quality tequila based mostly on Diageo’s labeling phrases. Had they identified these merchandise have been (allegedly) adulterated with non-agave spirits, they wouldn’t have purchased these merchandise or would’ve paid much less for them.

The go well with in the end seeks $5 million in damages on behalf of shoppers, in addition to an injunction compelling Diageo to stop the misleading promoting alleged within the grievance. Through a press release, Diageo international head of agave Sophie Kelly responded that “these claims of adulteration are outrageous and categorically false.”

In keeping with Mexican regulation, tequilas branded as “100% de agave,” or related variations, should be produced solely from Blue Weber agave grown in particular areas of Mexico. Whereas it’s allowed so as to add flavoring substances post-distillation, these can solely comprise as much as one % of the overall quantity. Nevertheless, using spirits not derived from Blue Weber agave is strictly forbidden. Tequilas that embrace spirits from cane, corn, or different sugars are categorized as “mixtos” and are typically labeled accordingly (or generally merely known as “tequila” with out the “100%” designation).

In Mexico, the Consejo Regulador del Tequila (CRT) enforces laws, certifying that merchandise despatched to market adjust to each manufacturing necessities and labeling requirements. For tequila exported to the USA — the most important marketplace for tequila — the U.S. Alcohol and Tobacco Tax and Commerce Bureau (TTB) additionally enforces labeling guidelines, deferring to Mexico’s laws. 

“Don Julio and Casamigos tequilas are crafted from 100% Blue Weber Agave and, following a rigorous certification course of by the CRT, are in full compliance with the official tequila normal (NOM) and U.S. TTB laws,” Kelly stated in a press release. “We stay up for vigorously defending the standard and integrity of our Tequilas in court docket.”

Nevertheless, the lawsuit challenges the concept certification by the CRT equates to fact in promoting. The submitting cites a current report by agave spirits authority Mezcalistas, during which protesting agave farmers assert that there’s a lack of regulatory compliance all through the trade, significantly regarding the concern of tequila adulteration.

The lawsuit additionally ranges a extra inflammatory allegation of CRT corruption. “There are studies that ‘CRT officers have been turning a revenue by permitting some tequila companies to combine cane or corn alcohol into Tequila that’s then labelled as 100% agave,’” the court docket submitting says. “This has been confirmed by sending ‘samples of tequila for laboratory evaluation’ and observing ‘vehicles delivering cane alcohol to distilleries.’”

These allegations stay wholly unsubstantiated, and lots of the extra severe accusations within the grievance rely closely on secondhand “studies” just like the aforementioned Mezcalistas dispatch. Nevertheless, it instantly addresses a long-simmering debate within the tequila trade over transparency, labeling requirements, and uneven regulation. 

Components have emerged as a specific flashpoint inside the trade over the previous two years, because the CRT has prohibited producers from advertising their tequilas as “additive free,” at occasions taking actions that critics view as heavy-handed.

Final month, the CRT filed its personal lawsuit in U.S. District Courtroom, accusing the Additive Free Alliance — an trade non-profit selling transparency in tequila manufacturing and labeling — of deceptive shoppers. The CRT asserts that it’s the solely regulatory physique with the authority to certify tequilas as “additive free,” though it at present provides no such certification. 

In February the CRT additionally briefly blocked exports of Patrón into the U.S. in response to a nationwide promoting marketing campaign touting the tequila’s lack of “secret substances.”