Puma sponsors VP records, home to reggae stars such as Buju Banton and Elephant Man. The company has put a zero tolerance policy on homophobia after a Puma-sponsored performance attacked lesbians and gays.
Lyrics from Buju Banton's song 'Boom Bye Bye' described a gay man being shot in the head and covered with acid.
Puma's invoked its threat after an Olympic concert in Athens, where the Jamaican reggae stars' lyrics shocked onlookers.
The Jamaican gay rights group J-Flag said yesterday said
Puma's stand "sends a powerful message from a major sponsor and sets a precedent for others to follow".
J-Flag called on other corporate sponsors of reggae concerts -- which include like Pepsi, Coca-Cola, Smirnoff Ice and Benson and Hedges -- to follow Puma's lead.
A number of reggae concerts have been cancelled in Germany after the lyrics were made public.
Philipp Braun, spokesperson for the Lesbian and Gay Federation in Germany, said: "We look forward to working with Puma in the future to find concrete ways to combat homophobia in Jamaica and across the world."
Brett Lock of gay rights direct action group OutRage! added: "Puma's stand means that performers like Buju Banton, Elephant Man and others will have to choose between continuing to make anti-gay incitements to violence and lucrative sponsorship deals.
"They'll have to decide which is more important: cheerleading harassment and attacks on lesbian and gay people or international superstar status. They may get away with their homophobic bile in Jamaica -- where repressive legal discrimination against gay people still exists -- but they won't on the global stage."
Puma is not the only company to stop supporting homophobic singers. Cigarette manufacturer RJ Reynolds dropped Jamaican star Beenie Man from a concert in the US, which was to have been part of the 'Salem Stir Your Senses' tour, on hearing some of his offensive lyrics.
Beenie Man recently said he would stop using anti-gay lyrics.
"Salem made a business decision to not feature him as a performer. It came to our attention that some of his songs contained lyrics that are inappropriate and unacceptable," David Howard, a spokesman for Reynolds, which owns the Salem brand, said.
The singer cut two anti-gay songs from his act when he appeared in Philadelphia last week to avoid a demonstration threatened by members of Pennsylvania Lesbian and Gay Task Force. A second gig in the city scheduled for the autumn has been cancelled.
Puma is also an official sponsor of the Jamaican Olympic team.
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