Photo Credit: Cîroc Vodka by André Banyal / CC by 2.0
Spirits giant Diageo is exploring the sale of Cîroc Vodka after the brand’s association with the now-disgraced music mogul Sean ‘Diddy’ Combs.
London-headquartered spirits group Diageo is exploring the sale of Cîroc Vodka, after its association with now-disgraced music mogul Sean “Diddy” Combs, who previously backed the brand. The company has contacted potential buyers, including beverage companies and buyout firms to gauge interest, according to people familiar with the matter in a report by Bloomberg.
Diageo has been entertaining the idea of selling the vodka brand after the settlement earlier this year of a lawsuit with Combs in which he accused the company of racism in its alleged neglect of Cîroc Vodka and DeLeón Tequila. Combs later withdrew his accusations, and business relations between the two entities ended.
Since then, Combs has been hit with a deluge of sexual abuse allegations and lawsuits. He was also arrested in September by federal agents on charges of racketeering and sex trafficking.
Representatives for Diageo declined media requests for comment, but the company previously said its “disciplined and strategic portfolio management will continue to be an integral part of our capital allocation strategy.” Cîroc isn’t the only brand the company has been looking to divest; it agreed in July to sell Pampero Rum and Safari flavored liqueur.
Even before the Diddy allegations, Diageo has struggled in the past few years due to a slowdown in demand abroad for high-end spirits, including China and the Americas. The company’s net sales in the last fiscal year through June dropped by 1.4%, while shares of Diageo have fallen by 12% in London trading over the past year. In North America, net sales of Cîroc declined by 28% for the fiscal year ending in June.
Declining revenue and Cîroc’s legacy connection to Diddy could compound issues regarding a potential sale, but the brand’s continued strong presence in the nightclub scene could yet attract certain clientele who see potential in a turnaround. Diageo also owns other vodka brands, including Ketel One and Smirnoff.
