Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Beer; Cider/perry; RTDs/High-strength premixes; Spirits; Wine
Executive summary
Unregistered production negatively affected sales
Unregistered production of alcoholic drinks is relatively high in Turkey.
According to industry experts, 60% of wine production was unregistered at the
end of the review period. Such an unregulated market environment results in
difficulties for both producers and retailers. Even if alcoholic drinks
recorded high and considerable value and volume growth in 2007, this is
unlikely to be reflected in official consumption figures due to unregistered
production. Sales targets of companies active in the alcoholic drinks market
cannot be met or correctly calculated due to unregistered production.
High taxes adversely impact value growth
High import and sales taxes led to companies increasing prices. High prices
slowed consumption and pushed consumers away from off-trade purchases and
on-trade outlets, and towards unregistered, and consequently untaxed,
alternatives. Also, high importation taxes resulted in imported drinks
becoming unappealing to consumers because they are more expensive than
domestic products. The Turkish Government is not expected to reduce tax rates
over the forecast period, although the governing party -- AKP -- is known for
its conservative stance, and might not address the issue as a matter of
urgency.
Increased competition in alcoholic drinks environment
Increased competition occurs between large players and smaller companies
aiming to gain share. At the end of the review period competition was fuelled
by rising demand, especially in on-trade establishments. An increased number
of consumer foodservice outlets and the greater tourism potential of Turkey
opened the market for competition. Large companies like Mey and Efes faced
competition from smaller companies such as Elda Company with Efe brand and
Burgaz Company with Burgaz brand that had small shares. Especially in the
aniseed-flavoured spirits, Mey and Efe entered into competition with several
promotional tools, such as gift promotions, discounts, free desks, points to
be used to obtain extra products, and also drink-tasting days and festivals.
In on-trade, gifts to establishments were particularly important, mainly in
the form of free glasses, furniture or decorations.
Increased supermarket and hypermarket penetration boosts off-trade sales
Demand for supermarkets and hypermarkets increased considerably in Turkey at
the end of the review period. The number of retail outlets increased, and more
people started to visit supermarkets and hypermarkets. Shelves for alcoholic
drinks diversified and widened in 2007. An increasing number of companies
entered the environment with many brands. New aniseed-flavoured spirit brands
launched late in the review period, new beer types and brands and also new
wine brands, especially from Mey Company, took strong places on supermarket
and hypermarket shelves. These outlets also became important for promotions,
advertising and presentation for new brands. Moreover, imported spirits were
more readily available in supermarkets and hypermarkets than in specialist
outlets.
Consumption is expected to increase over the forecast period
Precautions against unregistered alcoholic drinks' production are expected to
be increased by the government over the forecast period, which will mean
higher sales of registered products. Demand for higher quality and registered
products is particularly likely to increase in on-trade outlets. Closer
relations with the EU are expected to influence the Turkish Government to
reduce taxes on imported products. Moreover, good economic conditions are
expected motivate companies to raise investment in new products. Imported
products are predicted to bring particular dynamism to the alcoholic drinks
market in coming years.
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