Don Julio Sued for Selling Cane Alcohol as 100% Agave Tequila

Three federal class action lawsuits filed in 2025 accuse Diageo North America — the London-headquartered spirits giant and parent company of Don Julio and Casamigos — of selling adulterated tequila falsely labeled as “100% agave.” The lead case, filed May 5, 2025 in the U.S. District Court for the Eastern District of New York by law firm Hagens Berman Sobol Shapiro LLP, alleges that independent laboratory testing using isotope analysis detected significant concentrations of cane-derived alcohol in multiple expressions of both brands. A California RICO complaint filed later that month by the law firm Baron & Budd, in conjunction with Hagens Berman, alleged that some expressions contained as little as 33 percent agave-derived ethanol.

Diageo has denied all allegations and filed a motion to dismiss the Florida case in October 2025, calling the testing “scientifically unvalidated” and the claims “implausible.” As of June 2026, no court has ruled on the motion to dismiss, no class has been certified, and no settlement has been reached. The cases remain among the most closely watched consumer fraud lawsuits in the global spirits industry.

Don Julio Lawsuit Timeline and Updates

January 2025 — Mezcalistas Investigation Surfaces the Allegations

The legal cases did not emerge from nowhere. On January 13, 2025, Mezcalistas — an industry publication focused on agave spirits — published an investigation citing agave farmers in the Mexican state of Jalisco who alleged that large tequila companies were illegally blending cane alcohol into tequila then sold and exported as “100% agave.” The farmers claimed laboratory tests existed to support the allegations and that Consejo Regulador del Tequila (CRT) officials had been complicit, allegedly allowing the adulteration in exchange for payments.

Mezcalistas had been tracking the story since protests by agavero farming communities in Jalisco began intensifying in late 2024. Farmers argued that depressed agave prices — driven partly by overproduction and partly by large producers using cheaper alcohol sources to cut costs — were threatening their livelihoods. The January 2025 investigation set the factual foundation the lawsuits would later build on.

May 5, 2025 — First Class Action Filed in New York

Hagens Berman Sobol Shapiro LLP filed the first formal class action against Diageo North America in the U.S. District Court for the Eastern District of New York on May 5, 2025. Named plaintiffs included consumers Avi Pusateri and Chaim Mishulovin, as well as Sushi Tokyo, a restaurant that purchased both brands for its establishment. The complaint alleged that Diageo falsely marketed Don Julio and Casamigos as “100% agave” tequila when the products allegedly contained significant concentrations of cane or other non-agave alcohol. It cited the Mezcalistas reporting and claimed that unidentified testing had confirmed the products did not meet regulatory requirements for 100% agave classification. The New York case sought over $5 million in damages and asserted violations of New York and New Jersey consumer protection statutes, as well as unjust enrichment claims.

May 15, 2025 — Florida “Copycat” Suit Filed

Ten days after the New York filing, Florida resident Nabil Haschemie filed a nearly identical class action in Miami-Dade County. Diageo later described this as a “me too” filing in its motion to dismiss, noting that Haschemie acknowledged becoming aware of the New York complaint before filing and conducted undisclosed testing only after seeing the first suit. The Florida case was subsequently moved to the U.S. District Court for the Southern District of Florida. By August 2025, eight additional named plaintiffs from Hawaii, Louisiana, Illinois, California, Colorado, Texas, Georgia, and Pennsylvania had joined the Florida action.

May 2025 — California RICO Complaint Adds Lab Numbers

A third and more detailed complaint was filed in the San Francisco division of the U.S. District Court for the Northern District of California by Jacqueline Jackson, represented by Baron & Budd in conjunction with Hagens Berman. This case made a critical addition the New York and Florida filings lacked: it published specific alleged test results. The California complaint invoked the Racketeer Influenced and Corrupt Organizations Act (RICO), accusing Diageo of fraudulent scheming and racketeering through what the plaintiffs called “The Adulterated Tequila Enterprise.”

The California filing named Diageo, Diageo Mexico, and the CRT itself as participants in the alleged enterprise — arguing that the regulatory body responsible for certifying tequila authenticity could not be trusted because Diageo Mexico and Brown-Forman Mexico held vice presidencies on the CRT’s board of directors. In the plaintiffs’ attorneys’ words: “In effect, the very companies that CRT purports to regulate are the ones running it.”

July 2025 — Diageo Files Initial Response

In July 2025, Diageo filed its initial response to the legal actions, flatly denying all allegations. The company stated that all bottled Don Julio and Casamigos tequilas labeled “100% agave” were made entirely from blue weber agave (Agave tequilana Weber blue variety) and that its products met all applicable standards under Mexico’s Norma Oficial Mexicana (NOM-006-SCFI) as well as U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations.

October 2025 — Motion to Dismiss Filed in Florida

Diageo filed a formal motion to dismiss the Florida class action in the U.S. District Court for the Southern District of Florida in October 2025. The filing attacked the lawsuits across multiple grounds: the testing methodology was scientifically unvalidated, the New York complaint contained no actual test results, the Florida filing was a near-verbatim copy of the New York complaint, and the plaintiffs had not alleged any specific flaw in Diageo’s production process or identified any whistleblower among the hundreds of people involved in making the tequilas. In a line that drew coverage across the drinks industry, Diageo’s lawyers wrote that the plaintiffs’ theory was “the equivalent of someone claiming the earth is flat because he saw a ‘test’ result somewhere that says his neighbor’s backyard is level.”

Diageo also argued in its New York pre-motion conference request that plaintiffs lacked standing because paying a “premium price” alone was insufficient to establish economic harm under New York or New Jersey consumer protection law, and that CRT certification provided a potential safe harbor from liability.

2026 — Cases Proceed; No Rulings Yet

As of June 2026, the court has not ruled on Diageo’s motion to dismiss the Florida case. The California RICO complaint remains separately active, and the New York matter is also proceeding. No class certification has been granted in any of the three cases, and no settlement has been announced. The cases are in the pre-class-certification phase, with the outcome of the Florida motion to dismiss likely to shape next steps across all three filings.

What the Lawsuit Alleges: The 100% Agave Fraud Claim Explained

The core allegation is straightforward: bottles of Don Julio and Casamigos labeled “100% agave” contain significant quantities of alcohol derived from sources other than agave — most likely sugarcane. If true, that makes the products not just misleadingly marketed but potentially illegal under both Mexican and U.S. law.

Under Mexico’s official tequila standard, NOM-006-SCFI, tequila labeled “100% agave” must be produced entirely from blue weber agave sugars, with no other fermentable material added. A product containing cane alcohol would instead qualify only as a “mixto” tequila, which requires a minimum of just 51 percent agave-derived sugars. Mixto tequila sells at significantly lower price points than 100% agave products — and would never command the $50 to over $1,000 per bottle that Don Julio’s premium expressions fetch at retail.

The U.S. TTB separately requires imported spirits to comply with their country-of-origin labeling standards and accurate disclosure of alcohol content and composition. A product falsely claiming 100% agave status would potentially violate TTB labeling regulations as well as state consumer protection laws in every jurisdiction where it was sold.

These figures, if accurate, would mean the tested expressions contained less agave-derived alcohol than is required even for the lower “mixto” classification — which itself requires only 51 percent. The California RICO plaintiffs argue this represents not a minor technical violation but a wholesale fraud on consumers who paid ultra-premium prices on the explicit promise of agave purity.

The Science Behind the Allegations: How Isotope Testing Works

The lawsuits rest on isotope analysis — a scientific method that exploits a fundamental difference in how different plant species process carbon during photosynthesis. Agave is a C3 plant, meaning it uses the C3 photosynthetic pathway and incorporates carbon-12 at a particular ratio. Sugarcane is a C4 plant, which processes carbon-12 and carbon-13 differently. When cane alcohol is blended into an agave-derived spirit, the carbon isotope ratios shift away from the C3 signature and toward the C4 signature.

The technique used in the lawsuits, identified in Diageo’s motion to dismiss as Nuclear Magnetic Resonance (NMR) spectroscopy performed by a European laboratory, attempts to read that carbon fingerprint and determine what percentage of the ethanol present came from each plant source. NMR is an established technique in food science and is used by European Union regulatory bodies to authenticate wine and other agricultural products.

Diageo’s defense attacks the methodology on multiple fronts. The company contends the test is “scientifically unvalidated” for tequila specifically, that only one sample per brand was tested, that the plaintiffs disclosed only one of three isotope values needed to interpret the results fully, and that the European lab conducting the tests has not been validated by any relevant regulatory body for spirits analysis. Similar to the scrutiny that scientific evidence receives in pharmaceutical injury cases — such as those tracked in the Ozempic lawsuit — the reliability of the testing methodology will likely become a central battleground in any pre-trial proceedings.

The RICO Theory: Why California Is the Most Aggressive Filing

The California complaint is categorically more ambitious than the New York and Florida cases. Where those suits allege straightforward consumer fraud and false advertising, the California filing invokes RICO — a federal statute originally designed to combat organized crime — to characterize Diageo’s alleged conduct as an ongoing criminal enterprise.

Under RICO, plaintiffs must demonstrate a pattern of racketeering activity by an “enterprise” composed of associated persons or entities. The California complaint identifies what it calls “The Adulterated Tequila Enterprise” as comprising Diageo, Diageo Mexico, the CRT, and unnamed individuals involved in producing, certifying, labeling, and selling the products. The theory is that the CRT — which issues the certificates of authenticity that Diageo relies on as a defense — is not an independent regulator but a captured body controlled by the same companies it is supposed to oversee.

The CRT corruption allegation draws on the agave farmers’ claims reported by Mezcalistas: that CRT officials have been allowing large producers to blend cane alcohol into tequila in exchange for payments, then certifying the products as 100% agave for export. The California plaintiffs argue that the CRT’s dual role — as both certifier and industry body chaired by the very companies under scrutiny — invalidates Diageo’s reliance on CRT certification as evidence of compliance.

Diageo has not formally responded to the California RICO complaint in court as of the most recent reporting. The RICO theory, if it survives early motions, would expose Diageo to treble (triple) damages and significantly broader discovery into its production records, internal communications, and relationship with the CRT — making it the highest-stakes of the three cases.

Diageo’s Defense: Why the Company Says the Claims Cannot Stand

Diageo has been consistent and aggressive in its public and legal responses. The company’s position rests on several pillars.

Regulatory compliance: Diageo states that all its tequilas undergo meticulous production processes overseen by the CRT, which grants annual certification to produce 100% agave tequila, and issues a certificate of authenticity for each batch exported. The U.S. TTB has also approved Diageo’s labels. Diageo argues this dual-layer regulatory approval is nearly dispositive — if the world’s most rigorous tequila oversight system has repeatedly certified the products, a single European lab test cannot overturn years of regulatory approval.

Flawed testing: The October 2025 motion to dismiss describes the plaintiffs’ testing method as “scientifically unvalidated” for tequila and notes that the test relied on just one sample of each brand. Diageo further points out that plaintiffs reported only one of the three isotope values needed to interpret the results, making it impossible to evaluate what the test actually showed. The motion dismisses the California RICO lab data with similar force, calling the results “threadbare.”

No supporting evidence of wrongdoing: Diageo repeatedly emphasizes that with hundreds or thousands of people involved across its supply chain — agave farmers, distillery workers, chemists, CRT inspectors, export officials — a fraud of the scale the plaintiffs allege would require mass complicity with no whistleblowers, no internal disclosures, no regulatory findings, and no judicial determinations. The company argues this implausibility alone supports dismissal.

Standing and harm: On the New York complaint specifically, Diageo argues that paying a premium price does not constitute cognizable economic harm if the plaintiffs cannot allege with specificity that the product they received differed from what was promised. Since the New York complaint included no actual test results, Diageo contends there is no factual predicate for any damages claim.

Who Qualifies to File a Claim

Consumers do not need to take any action to join a class action — if a class is certified, all eligible purchasers within the defined period are automatically included unless they opt out. Hagens Berman maintains a case page for the Don Julio and Casamigos lawsuits where affected consumers can register their interest and receive updates.

Restaurants and commercial purchasers, like Sushi Tokyo in the New York complaint, may also qualify as class members. The class definition in the eventual certification motion will determine whether commercial buyers are included and on what terms.

What Consumers Could Receive in a Settlement

Consumer class actions against food and beverage companies for labeling fraud have produced a range of settlement outcomes in recent cases. Based on comparable settlements in the spirits and food industries, likely structures would include:

These figures reflect industry comparables, not specific guarantees in this case. Don Julio 1942 retails above $150 per bottle in many markets; if a per-bottle refund were structured to reflect a meaningful price premium over what a mixto tequila would have cost, individual payments could be substantially higher for documented purchasers. Final settlement terms, if reached, would require court approval.

The Broader Industry Context: Tequila Fraud Is Not New

The Don Julio lawsuit sits inside a long and largely unresolved debate about transparency and adulteration in the tequila industry. For years, agave farmers in Jalisco have accused large producers of mixing industrial alcohol — primarily cane-derived ethanol — into tequila to reduce production costs. Agave takes seven to fifteen years to mature; sugarcane ferments in months. The cost differential is enormous at scale, and the temptation to adulterate is acute when agave prices rise or supply tightens.

The CRT has repeatedly defended its certification processes, but the California RICO complaint raises a structural problem that the industry has not fully answered: the CRT’s board includes representatives of the very companies the CRT certifies. The Mexican Chamber of the Tequila Industry (CNIT) has denied the lawsuit’s claims, but neither body has addressed the conflict-of-interest argument directly.

The tequila industry’s additive transparency debate erupted separately in 2025 when the CRT took legal action against the Additive Free Alliance, a consumer advocacy organization that had published a list of brands it deemed free of colorants, sweeteners, glycerin, and oak extract. Patrón — owned by Bacardi — faced a temporary export ban after the CRT found undisclosed additives. That episode demonstrated that even brands with robust marketing around purity and quality have struggled with regulatory compliance when scrutiny intensifies. The Don Julio case extends that scrutiny to the question of the alcohol itself, not just its additives — and the consequences for Diageo if the lab results hold up in court would be orders of magnitude larger than an additive dispute.

This case has parallels to the food fraud litigation that reached settlements in other premium product categories — similar in structure to the chicken price-fixing class action, where industry insiders were accused of systematically deceiving consumers and regulators about the true nature of what was being sold, and similar in legal theory to the Native shampoo lawsuit, where ingredient labeling was alleged to misrepresent what consumers were actually purchasing.

What This Lawsuit Teaches Consumers

The Don Julio class action raises a question most tequila drinkers have never had to ask: when a premium spirits brand says “100% agave” and a government regulator certifies it, how confident can you actually be?

The answer, these lawsuits suggest, is: less confident than the label implies. The CRT’s certification system exists, and Diageo’s compliance with it is not in dispute. What is in dispute is whether the CRT’s certification accurately reflects what is in the bottle — and whether an industry regulator whose board is populated by the industry it regulates can be trusted to enforce standards against the most powerful members of that industry.

These questions extend well beyond Diageo. If the isotope testing methodology the plaintiffs rely on is validated by the court — if experts testify that NMR spectroscopy can reliably detect agave-to-cane ratios in tequila — then the same test can be applied to any tequila brand. The legal and commercial implications for the industry could be substantial, particularly for large producers who rely on efficiency at scale.

For consumers, the practical lesson is simpler: premium prices are a promise, not a guarantee. Labels are legal representations that create enforceable rights. And since the Supreme Court’s 2024 ruling in Kirtz opened federal agencies to FCRA suits, and class action law continues to evolve, consumers have better legal tools than ever before to hold companies accountable when the product in the bottle does not match the words on the label.

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