Fine Wines/Champagne and Spirits in Turkey

PROSPECTS

Excise taxes hamper sales, whereas an increase in tourism boosts growth

Despite performing well in 2019, fine wines/champagne and spirits in Turkey continued to be impacted by government policies, with high excise taxes hampering what could be, an even stronger performance. Turkey usually increases prices on alcoholic drinks and tobacco products twice a year, in January and again in July.

Higher unit prices drive value growth, but threaten sales over the forecast period

The sharp depreciation of the Turkish Lira in 2019 drove up prices of imported alcohol in the country, benefiting overall value sales. However, 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 economic indicators.

Manufacturers focus on higher quality products as consumers demand single malt whiskies and gin

Turkey is witnessing rising demand for higher quality and more premium products among upper-income groups. As there is 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 fragmented landscape, as players offer limited edition bottles in an attempt to cut-through

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. This is thanks to their keen awareness, consumer loyalty and widespread distribution across the county, which makes them easily accessible to consumers.

As advertisements for alcoholic drinks are banned in Turkey, players focus on their international websites to boost awareness

The advertising of alcoholic beverages is prohibited in Turkey, along with the sponsorship of sporting and other events. Shops, bars and restaurants are also not allowed to advertise alcoholic drinks through external neon signs, posters or logos.

Consumers purchase fine wines/champagne and spirits in duty-free shops or abroad, to avoid paying high amounts of tax

The out-of-home consumption of fine wines/champagne and spirits in Turkey mostly consists of luxury brands, often selected to showcase in front of peers. However, home consumption is more likely to be driven by heritage and quality.

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