Three separate class action lawsuits have now been filed against the North American arm of Diageo for allegedly marketing adulterated tequila as 100% agave.

The lawsuits, filed in New York by two consumers and a sushi restaurant, a consumer in Florida, and a consumer in San Francisco, all suggest that the group’s Don Julio and Casamigos brands contain a portion of alcohol derived from sources other than agave, and if they had known of this fact, all would not have paid a premium price for, or not bought, the products.

It’s the San Francisco case that raises most eyebrows. While the others have alluded to scientific testing that can be carried out to determine the presence of non-agave alcohol, the RICO case filed by California resident Jacqueline Jackson claims to include results from that testing.

As the suits alleges: “To verify the falsity of Diageo’s claims, Plaintiff commissioned laboratory testing of Diageo’s flagship tequilas using a scientifically validated method: carbon isotope ratio analysis. This technique, which is widely accepted in food chemistry, identifies the plant origin of ethanol in a spirit and detects adulteration.”

According to the complaint, the tested samples of Casamigos blanco contained an estimated 33% of ethanol derived from agave, Casamigos reposado contained an estimated 42% of ethanol derived from agave, samples of Don Julio 1942 blanco contained an estimated 42% of ethanol derived from agave, and samples of Don Julio 1942 añejo contained an estimated 33% of ethanol derived from agave.

Initial response

Diageo has now filed its initial response to the New York agave class action.

In a statement to the press, a Diageo spokesperson said: “These claims are without factual or legal merit. The complaint fails to allege a single fact that comes close to supporting the baseless claim that Casamigos and Don Julio Tequilas are not 100% agave.

“All Casamigos and Don Julio tequilas labelled as ‘100% agave’ are made from 100% Blue Weber agave. We will vigorously defend the quality and integrity of our tequilas in court, and against anyone who is spreading misinformation and lies about our products.”

But how seriously are the allegations being taken? At present, if there has been an impact on the two brands, it’s too early to tell.

Market researcher Brand Finance recently published its 2025 Alcohol Drinks report which contains a ranking of the world’s strongest spirits brands based on a number of metrics, including marketing spend, awareness, consideration, reputation, acquisition, retention, market share, volume and price premium.

Typically, given their scale the top spot has gone to baijiu giants such as Moutai or Wuliangye, but this year it was Don Julio that was named the world’s strongest spirit brand.

And Don Julio has also continued to maintain a strong presence at this year’s Tales of the Cocktail in New Orleans. The brand’s sponsored party featuring bartending luminaries such as Julie Reiner, Charles Joly and Lynnette Marrero indicate it hasn’t lost its shine with the top of the industry.

But it’s Casamigos that is in a more delicate position. In Diageo’s most recently published interim results for North America, which reported sales in the region during the six months ending 31 December 2024, Don Julio grew in organic net sales by 61%. In the same period, Casamigos declined by 22%.

That’s a startling performance from a brand whose sale sparked a tequila gold rush and was the fastest growing of any spirits brand in the 2022 edition of DI’s Millionaires’ Club.

It appears that, after the initial sales bounce and the Covid-related premiumisation spike, Diageo hasn’t worked out what to do with the young brand. Pricewise, it occupies the same strata as the most established Don Julio and Patrón and, while celebrity association does still benefit tequila brands according to an IWSR report, the benefit is becoming less pronounced – from a 40% increased volume growth vs global category growth in 2022 to 16% in 2023 for celebrity-backed tequila brands.

In May, Diageo announced that it expects US tariffs to cost the business $150m each year, so one must assume an impact like that must greatly increase costs for a brand based in Mexico and primarily sold in the US.

As Diageo claims, the lawsuits may be baseless, but even if that’s true, the group has a Casamigos-shaped problem on its hands – especially as the agave spirits market normalises while continuing to navigate tariffs