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P. Diddy’s recent arrest dominated the news earlier this week, after he was charged with assault with a deadly weapon and making terrorist threats. The troubling incident is a little funny when you think of Diddy striking the victim with a kettlebell, but it’s no laughing matter for Combs. If he’s found guilty in the attack, the conviction could force him to sever ties with one of his best investments, his relationship with liquor distributor Diageo.
The Observer has a breakdown of how Combs’ arrest could force his hand into divesting from the liquor business if a conviction occurs. Anyone involved in the “manufacture or sale of alcohol [is] required to hold licenses in good standing.” With a strike on his record, Diddy’s ability to keep his alcohol license could potentially come under fire when ATF, state, and federal laws clash together.
The Alcohol and Tobacco Tax and Trade Bureau, a bureau of the United States Department of the Treasury, requires manufacturers and producers of alcohol to apply for a permit. According to section §1.24 of the federal code, “such person (or in case of a corporation, any of its officers, directors, or principal stockholders) has not, within five years prior to the date of application, been convicted of a felony under Federal or State law, and has not, within three years prior to date of application, been convicted of a misdemeanor under any federal law relating to liquor, including the taxation thereof.”
Observer‘s report goes into how tricky state laws can be as they relate to criminal convictions and the liquor industry.
In California, for example, Business and Professions Code Section 23952 — Felony and law violation, anyone involved in the “manufacture, sale, or distribution of alcoholic beverages [must show that] …the applicant has not been convicted of a felony…” In Michigan, felons cannot own a Michigan liquor license, and in Oklahoma, “To be eligible for a liquor license, you must be pardoned on all felonies…” In New York, according to the State Liquor Authority, “A convicted felon cannot be employed by a licensed manufacturer or wholesaler.”
At last count, Diddy’s DeLeon tequila was distributed in 18 different states, any one of which could prove to be a snare.
And while we know him for music, make no mistake that P. Diddy’s ventures outside the booth have been his biggest earners in recent years. Forbes estimated his earnings at $735 million, landing him at the top of their list of hip-hop’s richest artists. There’s Revolt, Sean Jean clothing and water brand Aquahydrate, but Puffy’s relationship to the alcohol industry plays a key role in his fortune and extends far beyond the typical entertainer endorsement deal.
Combs first went into business Diageo, the world’s biggest distilled drinks company, in 2007, and helped grow Ciroc from “50,000 nine-liter cases a year to nearly 2 million.” With Ciroc, he earns a percentage on all profits. In late 2014, Diddy and Diageo decided to take their business relationship further by doing a deal to buy luxury tequila brand DeLeon. Both sides invested cash and are equal partners in its equity.
Puffy has deep pockets that could potentially help him lawyer his way out of the UCLA situation. Also, he could indeed be the victim in the case, as he contends he was. Whatever the case may be, Diddy has a lot riding on the outcome, in more ways than one.
(Via Observer)