Winemakers seek tax regime change
Güncelleme Tarihi:
by Reeta Paakkinen
Oluşturulma Tarihi: Şubat 28, 2009 00:00
ISTANBUL - Winemaker Doluca believes the government may declare a new and more convenient tax regime for the alcoholic beverages industry. Speaking to Hürriyet Daily News & Economic Review, Doluca General Manager Adnan Erem dismisses claims that the ruling Justice and Development Party is pursuing a policy of pushing down wine consumption through high taxes
A new tax regime for the alcoholic-beverages industry may be announced soon, Turkish wine producer Doluca believes.
General Manager Adnan Erem favors governmental support for the industry, without which, he said, Turkey Ğ despite its good infrastructure and geography Ğ could never become a major wine exporter.
"Turkey is already among the leading grape producers in the world and domestic wine consumption is growing," Erem told the Hürriyet Daily News & Economic Review last week. "Although during Ottoman times, wine culture was very limited, Anatolia is historically a heartland of wine production."
So far, Turkey has not been able to capitalize on that history because wine production is a long-term investment that requires a supporting regulatory framework, Erem noted. "Producing wine takes easily seven years," he said. "If the government makes a decision to support the wine industry, like it did for tourism in the 1980s, this would create notable opportunities for Turkey."
Exporting to the world
In 2008, Turkey exported approximately 6 million liters of wine and imported 3 million. There are currently some 100 wine producers in the country and Doluca, established in 1926, is one of the oldest. Today the company employs 250 people and has a production capacity of 14 million liters of wine a year. Some 20 percent of the firm’s wines are exported, mainly to Germany, Britain, the Netherlands and northern Cyprus.
Taxation and government control of alcoholic-beverage sales were hot topics in Turkey throughout 2008. Taxes on such products in Turkey are higher than in many European Union member states, Erem said, making up around 65 percent of the price wine producers charge their distributors. Existing regulations, though, are similar to those in EU countries and follow the recommendations of the World Health Organization, or WHO.
"I do not think the government is pushing down wine consumption through tax policy," Erem said. "Taxes on alcoholic beverages are high, but our Treasury needs tax revenue. The Ministry of Health simply wants to keep young people away from alcohol."
Still, the sector hopes to see a revision of tax regime. "Spirits producers are expecting some regulations to be revised before, or right after local elections on March 29."
The global crisis has not led to a notable decline in Doluca’s business. But consumer dynamics are changing. "There has been a fall of consumption in premium restaurants, which have lost some 20 to 25 percent of their clientele since November. But consumption in mid-priced restaurants and at home has risen."
"Consumption of wine has clearly exceeded that of rakı," he said, referring to the unofficial national alcoholic drink.
General Manager Adnan Erem favors governmental support for the industry, without which, he said, Turkey Ğ despite its good infrastructure and geography Ğ could never become a major wine exporter.
"Turkey is already among the leading grape producers in the world and domestic wine consumption is growing," Erem told the Hürriyet Daily News & Economic Review last week. "Although during Ottoman times, wine culture was very limited, Anatolia is historically a heartland of wine production."
So far, Turkey has not been able to capitalize on that history because wine production is a long-term investment that requires a supporting regulatory framework, Erem noted. "Producing wine takes easily seven years," he said. "If the government makes a decision to support the wine industry, like it did for tourism in the 1980s, this would create notable opportunities for Turkey."
Exporting to the world
In 2008, Turkey exported approximately 6 million liters of wine and imported 3 million. There are currently some 100 wine producers in the country and Doluca, established in 1926, is one of the oldest. Today the company employs 250 people and has a production capacity of 14 million liters of wine a year. Some 20 percent of the firm’s wines are exported, mainly to Germany, Britain, the Netherlands and northern Cyprus.
Taxation and government control of alcoholic-beverage sales were hot topics in Turkey throughout 2008. Taxes on such products in Turkey are higher than in many European Union member states, Erem said, making up around 65 percent of the price wine producers charge their distributors. Existing regulations, though, are similar to those in EU countries and follow the recommendations of the World Health Organization, or WHO.
"I do not think the government is pushing down wine consumption through tax policy," Erem said. "Taxes on alcoholic beverages are high, but our Treasury needs tax revenue. The Ministry of Health simply wants to keep young people away from alcohol."
Still, the sector hopes to see a revision of tax regime. "Spirits producers are expecting some regulations to be revised before, or right after local elections on March 29."
The global crisis has not led to a notable decline in Doluca’s business. But consumer dynamics are changing. "There has been a fall of consumption in premium restaurants, which have lost some 20 to 25 percent of their clientele since November. But consumption in mid-priced restaurants and at home has risen."
"Consumption of wine has clearly exceeded that of rakı," he said, referring to the unofficial national alcoholic drink.