Good Morning! If you’ve been watching the news in the tequila world lately this newsletter will not come as a shock, but it may help give you a condensed summary of what the heck is actually going on. If you haven’t been reading about the tequila drama then buckle up! There’s a lot to cover.

Lui recently posted this update on his youtube channel to give some clarification on what exactly the charges are that are being brought against Diageo:

For all of you that aren’t caught up on the situation read on to get a quick recap and a breakdown of what all this means.

Quick Recap on Diageo and its Class Action Lawsuits

Let’s get up to speed on what the deal is with this whole situation

For any of our new subscribers we thought it might be pertinent to get a little background on who Diageo is and what exactly the big deal is about these lawsuits. Diageo is a spirits giant based in London that owns many well known liquor brands. For the sake of what we are here to talk about, Diageo owns both Don Julio Tequila and Casamigos. These two brands are considered “luxury” brand tequilas and thus are usually on the higher end of the price scales in both bars and retail stores. As we know by some of Lui’s most viral tiktoks, Casamigos has been pegged for a while now as a tequila riddled with additives that attempt to con consumers into purchasing lower quality tequila at astronomical prices.

Agave farmers have been ringing the alarm bells about these big tequila companies for a while now. They claim that in an effort to drive down agave prices and force small agave farms to sell out to big tequila, big name tequila brands are adulterating their products with corn and cane alcohol. This is all being done in spite of the non-profit Tequila Regulatory Council, also known as the CRT, which is supposed to be holding tequila producers to the accepted standards for labeling their products as 100% agave. The CRT is meant to represent all parties involved in the tequila making process, including the agave farmers, but suspicions mount that the CRT is corrupt and allowing for these companies, like Diageo, to fly under the radar when it comes to regulations.

So, What are the Charges?

What’s being alleged and what it all means

Back in May a class action lawsuit was filed by the law firm Hagens Berman alleging that Diageo was falsely advertising their tequilas Don Julio and Casamigos as 100% agave when there is evidence to the contrary. Their website has a summary of the case that they have filed along with the formal complaint for any legal-minded readers.

The goal of such a lawsuit is to not only hold Diageo accountable for their gross deception but also to help bring about more scrutiny in the regulation process. The CRT stands to lose a lot of credibility on these allegations (whatever credibility it has currently) at best and risks exposure of corruption at worse. Recent developments though, show that the CRT is no longer going to be collateral damage in this one lawsuit, it may well be a direct target in the latest case.

In the latest development yet another class action lawsuit was filed against Don Julio and Casamigos parent company Diageo. This lawsuit filed in the beginning of July alleges that independent lab testing has determined the exact amounts of agave vs other alcohols actually contained in each iteration of these tequila brands AND slaps RICO charges into the mix on top of that. According to the amounts of non-agave spirits present in the tested tequilas this new lawsuit asserts that there is no way for the levels or adulteration to occur in any given tequila without direct knowledge by the CRT.

The Breakdown: Numbers and Meanings

How much agave is actually in these tequilas?

Although getting my own eyeballs on the original document of the alleged percentage breakdown of agave vs other alcohols has proven near impossible, this article by the leading news source for all things agave, Mezcalistas, has a breakdown listed as follows:

Percent of agave-derived alcohols (allegedly)

• Casamigos Blanco 33%

• Casamigos Reposado 42%

• Don Julio Blanco 42%

• Don Julio Añejo 33%

These numbers not only are offensive because they are all obviously not 100% (as required to be labeled as 100% agave by standard) but also because these numbers don’t even qualify these tequilas to be classified as “mixtos”. Borrowing again from Felisa Rogers at Mezcalistas she outlines what exactly qualifies a spirit as tequila: “There are two legal categories of tequila: 100% agave tequila and simply “tequila.” One must (no surprise) be made from alcohol derived from 100% agave sugar. The other must contain at least 51% alcohol derived from agave sugar. This is colloquially known as a mixto.” This is of course is in addition to the requirements of where the spirit is produced.

So these brands aren’t even making tequila at all!

Rogers has written extensively about the allegations against big tequila distillers from agave farmers and this new lawsuit ties back to what farmers have been claiming since the beginning. Not only are Don Julio and Casamigos making something that doesn’t meet mixto standards, they are likely just cutting the agave-derived alcohol with other alcohols in a practice called “cold mixing” which is illegal in Mexico.

What is a RICO Charge?

Okay, so, all of this has lead us to the final question: what is a RICO charge and why is it so significant?

“The Racketeer Influenced and Corrupt Organization Act (RICO) was passed by Congress with the declared purpose of seeking to eradicate organized crime in the United States.” - US Department of Justice

Racketeering is a type of organized crime in which the perpetrators set up a coercive, fraudulent, extortionary, or otherwise illegal coordinated scheme or operation (a "racket") to repeatedly or consistently collect a profit. - Wikipedia

In essence this charge accuses Diageo of knowingly deceiving its consumers AND the CRT of having direct knowledge of this deception. The allegation is that in an effort to make more profit for themselves while at the same time lowering the value of agave in the market the CRT and Diageo worked together in a racketeering scheme. In this scenario the CRT would be directly profiting off of the fraudulent products in exchange for not penalizing or exposing the practices of Diageo.

Shortly after the news of the latest lawsuit broke, this news came to light. Diageo CEO steps down from role. Which surely is not a coincidence.

So things just keep getting crazier and crazier. Obviously we will be watching these cases very closely and keeping you all updated on any developments. The nuances of these cases and all of the ripples that will emanate out are definitely something we hope to dive into in smaller segments in the interim as well.

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Quick Hits:

• According to studies Millennials outdrink younger generations pushing brands to offer more spirit neutral options.

• Canned cocktails are becoming a mainstay in casual summer (and anytime) drinking but they are also getting boozier.

• Tequila Matchmaker recently posted a video describing the 3 highest scoring tequilas in the blanco category in the 2025 Agavos Awards and they were surprised by number 3!