The group faces on-going troubles in its domestic beer market

The group faces on-going troubles in its domestic beer market

Turkey's ban on off-trade alcohol sales after 22:00 will hit Anadolu Efes the hardest in the near-term, but it is excise tax rates that will determine whether the country's beer market recovers, according to an analyst.

Last week, the brewer and soft drinks group reported that its first-half domestic beer volumes fell by 14%, with the crackdown on alcohol sales among the reasons for its soft performance. The measures, introduced by the Turkish government in May, include a ban on alcohol advertising, restricting where drinks are sold and consumed, and forcing producers to include health warnings on packaging.

In a note today (15 July), Nomura analyst Edward Mundy said: “In the near term, we believe that the ban of retail sales of alcohol after 10pm will have the greatest impact.” Off-trade accounts are estimated to be around 70% of the Turkish beer market, according to Nomura. 

“This could decrease the market size by as much as 10%,” Mundy added. 

Next year could also be “another difficult year” for the company, even though it is focussing on adapting to the restrictions, the analyst said. 

However, in the long term, Nomura predicts that tax rates will be the biggest factor over whether Turkey's beer market bounces back. 

Since 2004, excise on beer has increased from TRY0.09 per litre to TRY0.27 at four times the EU average,” the note said. 

“Although visibility on future excise tax increases is low, we believe that increases over and above inflation could hold back renewed beer growth.”