Casamigos, Don Julio Tequilas Not Pure Agave? Diageo Fights Back Against ‘Baseless’ Labeling Lawsuits

British liquor giant Diageo (DEO) has filed an initial response in a U.S. lawsuit that alleges that it misled consumers by claiming that its tequilas are 100% pure, calling the allegation baseless.

Diageo filed the response to a proposed class action lawsuit in federal court in Brooklyn, filed in May. Two similar lawsuits were filed against Diageo in California and Florida in the same month.

The company, which also owns whisky brands such as Johnnie Walker, said the complaint provides no evidence to support the claim that its Casamigos and Don Julio tequilas are not "100% agave," according to a Reuters report.

The 100% agave label means that the tequila is made only from the sugars of the blue agave plant, specifically the Agave tequilana Weber variety. This signifies a higher quality tequila compared to "mixto" tequilas, which can include sugars from other sources like cane or corn.

The Brooklyn lawsuit alleges that Diageo falsely advertises bottles of Casamigos tequila as "Tequila 100% Agave Azul" and Don Julio bottles as "100% de Agave."

It said that an investigation found "they consist of significant concentrations of cane or other types of alcohol rather than pure tequila" and did not meet the regulatory requirements of the United States or Mexico to be called "100% agave." It seeks damages of more than $5 million and a court ruling prohibiting false advertising by Diageo.

On Stocktwits, the retail sentiment for Diageo shifted to 'bullish' from 'neutral' the previous day. The company's U.S.-listed shares have dropped nearly 20% year-to-date.

London-headquartered Diageo sells billions of dollars worth of tequila and Canadian whisky in the United States.

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