Diageo probed by Turkish competition body

Diageo has confirmed its Turkish spirits subsidiary Mey Icki is being probed by authorities amid competition concerns.

Diageo’s Mey Icki, producer of Yeni Raki, is being investigated by Turkey’s competition body

The Turkish Competition Authority, otherwise known as Rekabet, has launched an investigation into the group, producer of local brandy Yeni Raki, following preliminary inquiries.

A Diageo spokesperson said: “The Turkish Competition Authority has initiated an investigation into Mey. Mey will carefully review the issues raised and respond to the authority within the required time limit.”

Further details of the investigation have not yet been announced.

The news comes only a few weeks after the US Securities and Exchange Commission launched an inquiry into whether Diageo had skewed its sales figures into the country by shipping excess inventory to distributors.

However, Diageo’s CEO Ivan Menezes responded to the inquiry by claiming that he was “confident” about the internal standards of the group.

Diageo acquired Mey Icki for £1.3bn in 2011 in order to increase its presence in Turkey, described as an “attractive emerging market” at the time.

In its full year 2014/15 financial results, the group said Yeni Raki continued to perform “strongly” in its domestic market, reporting 4% growth in the year.

In 2014, German spirits producer Borco took over the distribution of all Yeni Raki expressions in order to “reposition the brand” in the premium market.

A number of drinks groups, including Diageo, have struggled in Turkey over the past two years after the country adopted strict legislation forbidding the advertising and promotion of alcohol on TV, as well as the sale of alcohol between 10pm and 6am.

However, the group saw its net sales rise 3% in Turkey in 2014/15 despite recent excise duty increases.