Diageo has declined to comment on the possible business effects of stiffer alcohol laws in Turkey, insisting only that it remains committed to its business in Turkey.
We asked the firm for its reaction to Turkey’s stiffer alcohol laws – on Sunday the country’s government published new regulations that will require drinks to carry labels such as ‘alcohol is not your friend’ on cans and bottles – and the possible effect upon Diageo’s growth and that of its peer group.
Laws enacted in May outlawed sale of alcohol between 10pm-6am, while a blanket alcohol advertising and promotion ban was imposed and TV shows, movies and music videos were forbidden to include scenes that simulate use of alcohol.
Mey Icki still a ‘fantastic business’
A Diageo spokeswoman told BeverageDaily.com today: “We remain committed to the market and to our business in Turkey. Mey Icki [Diageo bought the spirits concern for $1.93bn in February 2011] remains a fantastic business with an unparalleled selection of local spirits brands that complement our global spirits brands very well.
“Net sales were up 8% this year for our Turkey business," she added.
Powerful trade body spritsEurope was unavailable for comment today, but the body indicated its opposition to Turkey’s measures in a recent statement.
“The rapid approval of this law has been a surprise and total disappointment with no consultation of any of the industries affected,” spiritsEurope warned.
In terms of public health the decision was difficult to understand, the body added, since 82.4% of Turks aged 18+ never drink alcohol, according to a 2011 consumer study performed by TNS.
spiritsEurope pushes for consultation
Average consumption (below 4 liters/year) was also well below the EU average of 11 liters, based upon WHO figures, spiritsEurope added.
“So if ever advertising would influence the level of consumption – and we believe it does not – there is little to win and even less on harm reduction, yet the decision will have serious economic effects,” the body said.
New entrants would find it harder to gain access to Turkey, while le gitimate brands would be less accessible, giving incentives for illicit market to thrive, according to spiritsEurope.
Urging the Turkish government to consult industry on implementation of the laws, the trade body warned that as much as 50% of alcohol in Turkey already passed through informal channels.
“Because illicit products are beyond the reach of tax and public health officials, they represent foregone tax revenues to the government and carry an intrinsic health risk,” spiritsEurope added.