Fine Wines/Champagne and Spirits in Turkey

PROSPECTS

Political environment impacts fine wines/champagne and spirits

Fine wines/champagne and spirits in Turkey continued to be impacted by government policy in 2018, with higher excise taxes hampering an even stronger category performance. Turkey normally increases prices on alcoholic drinks and tobacco products twice a year according to their share in the domestic producer price index.

Higher unit prices

The prices charged for fine wines/champagne and spirits increased in 2018 due to a fall in the exchange rate of the Turkish lira against the US dollar and the euro, leading to higher importation costs. Over the forecast period excise tax increases and a further depreciation of the Turkish lira against the US dollar and euro are expected to serve as an obstacle to the stronger growth of fines wines/champagne and spirits, despite the anticipated positive impact of improved macroeconomic indicators.

Manufacturers focus on higher quality products

Turkey is witnessing rising demand for higher quality and more premium products among upper-income groups. As a result of weaker price sensitivity among high-end consumers, manufacturers are increasingly producing and importing new super premium products.

COMPETITIVE LANDSCAPE

Fine wines/champagne and spirits remains a fairly fragmented category

The most coveted fine wines/champagne and spirits brands in Turkey include Dom Pérignon, Johnnie Walker Black Label, Chivas Regal, Moët & Chandon, Rémy Martin XO and Hennessy thanks to strong awareness and widespread distribution. Moët & Chandon is popular among consumers seeking champagne for a celebration and who do not mind paying the extra when compared to a sparkling wine.

Advertisements for alcoholic drinks are banned in Turkey

The advertising of alcoholic drinks is banned in Turkey, along with the sponsorship of sporting and other events by alcohol brands. Shops, bars and restaurants are no longer allowed to advertise alcoholic drinks via external neon signs, logos etc.

Duty free shops and purchases abroad remain a threat

The out-of-home consumption of fine wines/champagne and spirits in Turkey mostly concerns ostentatious luxury brands. However, home consumption is more driven by heritage and quality.

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