Drinks companies, tourism industry criticize Turkey's plan to curb alcohol sales

ISTANBUL Fri Jun 7, 2013 8:42am EDT

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ISTANBUL (Reuters) - Drinks companies and the tourism industry voiced opposition to Turkey's plans to ban alcohol advertising and curb sales ahead of a final decision on the bill, saying it could hit tourism revenues and have little impact on alcohol abuse.

Turkey announced plans last month to ban alcohol advertising and stop shops selling alcohol from 10 p.m. to 6 a.m. and President Abdullah Gul has until Tuesday to sign or reject the bill.

Beer and spirits makers have said it is too early to determine the impact of the restrictions, but all criticized the plan.

Diageo, the leading spirits maker in Turkey and which bought local company Mey Icki in 2011, said on Friday that cooperation between government, industry and interest groups was a better way to tackle alcohol abuse.

Galip Yorgancioglu, managing director of Diageo Turkey, said in an emailed statement that regulation focusing on the realities of alcohol harm was better than a marketing ban that could affect tourism and other areas of commerce.

Pernod Ricard, the No. 2 spirits maker in Turkey, said it too was disappointed because it had not been consulted.

"We are not convinced that this will reduce alcohol abuse," a company spokesman said.

The curbs on alcohol by the Islamist government have added to anger in Turkey, reflected in a current wave of protests in the country, against what people see as Prime Minister Tayyip Erdogan's pursuit of an "Islamist" agenda that goes against the country's secular constitution.

Shares in Turkish brewer Anadolu Efes fell 7.6 percent and Turk Tuborg 2.0 percent on the day the restrictions were announced on May 24. They have since fallen a further 8.3 and 9.5 percent respectively.

A senior manager at a foreign alcoholic beverage company in Turkey, who requested anonymity, said the ban on advertising was the harshest measure as it limited the opportunity to market new products, necessary for expansion.

"It is impossible to do this by word of mouth alone," he said.

"Alcoholic beverage companies requested a hearing from the president. We also stress that in its current form the regulations would encourage counterfeit products," he said.

Another drinks executive said that, even before the law had come into effect, some stores had already faced pressure to remove alcohol-related advertising.

Foreign companies, he said, would think twice about investing in Turkey.

"Why should they invest in a country where they won't have the right to advertise? How can they market their products?"

Drinks companies estimate alcohol consumption per person in Turkey is 1.3 liters a year whereas the average is 10-11 liters in Europe and 16.5 liters in Russia.

TOURISM REVENUES SEEN HIT BY RESTRICTIONS

Turkey's tourism industry said the restrictions would hurt tourism revenues, a major economic sector.

"The changes in regulations will undoubtedly have a negative impact on numbers of visitors and tourism revenues," said Timur Bayindir, head of Turkey's TUROB tourism industry association.

"Turkey's medium-term goal for 2023 is to draw 50 million foreign visitors and $50 billion in revenues. To achieve this, revenue per tourist must increase to $1,000 from $800 now. However this is not possible by not selling drinks or restrictions on leisure."

Turkish tourism drew revenues of $29.4 billion in 2012 and tourism receipts helped finance more than half of the country's $46.9 billion high current account deficit last year.

(Additional reporting by Dominique Vidalon in Paris, Neil Maidment in London; Writing by Philip Blenkinsop; Editing by Susan Fenton)

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