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Diageo sets aside £33 million for Turkish fine
Diageo has set aside £33 million (US$46m) to cover a fine issued by Turkish authorities for “anti-competitive practices in the raki market”.
In 2015, the Turkish Competition Authority, otherwise known as Rekabet, launched an investigation into Diageo’s Turkish subsidiary, Mey İçki, which produces the Yeni Raki brand.
Diageo’s latest full-year fiscal results showed that the drinks group had charged £33 million to exceptional items “in respect of a Turkish Competition Authority investigation into certain [parts] of Mey İçki’s trading practices in Turkey”.
When approached by The Spirits Business, a Diageo spokesperson commented: “In February 2017 the Turkish Competition Board announced that it would impose an administrative monetary penalty on Mey İçki for involvement in anti-competitive practices in the raki market.
“The Turkish Competition Board’s full reasoned decision was published on 8 June 2017. We are now carefully reviewing the full reasoned decision.”
Diageo acquired Mey İçki for £1.3bn in 2011 in order to increase its presence in Turkey, described as an “attractive emerging market” at the time.
In 2016/17, Diageo’s net sales in Turkey grew 4%, driven by price increases implemented in response to tax hikes and a 4% uplift for its raki business.