Access hindered to Turkish liquor market, industry says

Date: 05/07/01

By David Cronin

EU ALCOHOL manufacturers have accused Ankara of hindering their access to the lucrative Turkish market in order to protect a massive domestic spirits firm.

The European Confederation of Spirits Manufacturers (CEPS) is enraged that almost five years after a customs union agreement with the EU came into effect, Tekel, the company which produces most liquor consumed in Turkey, also controls the import of all foreign alcoholic drinks except whisky and Champagne.

Under pressure from the EU institutions, Ankara has introduced a law which theoretically liberalises the market. But CEPS believes that it will make little difference in practice because of the "get-out clause" requiring exporters to dispatch more than one million litres of alcohol to Turkey each year to bypass Tekal. "This is a very high threshold," said group spokesman Robby Schreiber. "Only one or two companies will meet this level."

Although the EU-Turkey cooperation council has discussed the manufacturers' complaints on several occasions, there has been little movement on the ground. Enlargement Commissioner Günter Verheugen has promised to raise the industry's concerns when he visits Turkey later this month. Drinks producers are finding Turkey, where the declining influence of Islamic fundamentalists has led to a growing consumption of alcohol, an extremely difficult market to penetrate. With EU spirits exports to Turkey fluctuating between 3.2 and 4.7 million litres of pure alcohol, the Union's manufacturers only command about 10% of its market share. "Taking into consideration that the EU spirits industry is the world leader in export terms, this is not much," added Schreiber. Whisky producers, meanwhile, believe that the exemptions applying to their products have been neutered by a requirement that each consignment shipped to Turkey must be accompanied by six certificates.

The bureaucracy involved runs counter to the principle enshrined in the customs union - that goods which are freely traded in the EU should also be freely traded in Turkey, argues Nick Soper of the Scotch Whisky Association. "Guys who've been 30 years in this trade have told me they never came across a more difficult regime," he said. The hurdles encountered have led to a fall in the value of Scotch whisky sales to Turkey from €57 million in 1995 to €33 million last year. However, a Brussels representative of the Turkish industry and business association said his organisation did not regard the issue as a priority. "In principle, Turkish business is in favour of the full implementation of the customs union," explained Bahadir Kaleagasi. "But we understand that it might take time to challenge the rigidity of the system. We're confident this can be solved but we have to be patient."

EU alcohol manufacturers have accused Ankara of hindering their access to the lucrative Turkish market in order to protect a massive domestic spirits firm.