Anyone who has been to Turkey recently probably knows that the country is now one of the most expensive places in Europe to enjoy a glass of wine or beer. In fact, Turkey is now among the top five most expensive markets for rakı, the anise-flavoured spirit that is consumed in several other European countries, including Greece, Italy and France.
This is all thanks to the Justice and Development Party (the "AKP" in Turkish), which came into power in 2002 and has been slowly waging a war on booze, not by prohibiting it directly (as many other Muslim countries have done) but by chipping away at manufacturers' advertising freedoms and by jacking up taxes to make alcoholic beverages out of reach of the majority of Turks.
Let's take a look at the facts:
- In June 2002, the AKP adopted the Special Consumption Tax (ÖTV), which raised the tax on alcoholic beverages from 18% (the standard VAT rate) to an astounding 48%.
- Over the years, the ÖTV rate increased until it reached 63% in 2009. The AKP came under fire for its policy and in 2010, some ÖTV taxes were eliminated. At the same time, however, "lump sum" taxes were raised, compensating for the elmination of the ÖTV. The lump sum tax on a bottle of wine increased from 1.30 TL to 1.50 TL in 2010.
- Between 2002 and 2009, taxes on beer have increased a whopping 737%, with an additional 45% increase between 2009 and 2010.
- Raki has not been immune to the tax hikes, either. According to the Hurriyet Daily News, the price of a bottle of raki was 9.15 TL in 2002; in 2010 the same bottle cost 35 TL.
- In 2009, the government took another stab at rakı and beer: the AKP prohibited commercials that portrayed food items -- such as fish, meze and cheese, which often accompany rakı, or nuts and popcorn, which go well with beer -- alongside drinks.
- In 2010, the government instituted a "health tax" on alcohol and cigarettes, which enabled the Social Security Institution (SGK) to receive 1-2% of the revenue of each pack of cigarettes or bottle of alcohol sold to pay for the treatment of diseases such as lung and throat cancer. (I don't think many people, myself included, have a big problem with this tax; most countries have a health tax, or a "sin tax", on alcohol and cigarettes.)
- In October 2010, the ÖTV increased yet again: Bloomberg reported that "the flat charge on a liter of beer rose 26% to 44 kuruş, the levy on a liter of wine increased 25% to 2.44 TL, and the tax on [the] national drink rakı advanced 30% to 51.48 TL."
- Alcohol is now prohibited from appearing in commercials and advertisements. The new rules also stipulate that catering companies that organize events with alcoholic beverages must get a license before each event and that grocery stores can't place alcoholic beverages near products that attract children.
- The new rules also restrict sports teams from using the names of alcoholic drinks in their squad names, causing headaches for the Turkish basketball team, which goes by the name Efes Pilsen (after Turkey's most popular beer), and for the long-standing Efes Pilsen Blues Festival, the first and only blues festival in Turkey.
A selection of wines at our local Migros in Izmir. This photo was taken over a year ago and those prices are much higher today!
The AKP has made it clear that Turks, and anyone else who lives in Turkey, are completely free to drink booze. However, in jacking up the price of the beverages through taxes, the government has also made alcoholic beverages out of reach of many, many Turks, for whom a 35 TL bottle of rakı when they earn some 600 TL a month is simply an unfathomable luxury.
It seems to me that the AKP is aiming for two very incompatible goals here: 1) The party wants everyone in Turkey to toe the Turkish line. "You should be happy with tea and lentils" the message seems to be; and 2) "Well, if you insist on drinking wine/raki/beer/rum/vodka, we're just going to punish you for it by making you pay taxes."
It is in this way, I believe, that the AKP is able to pursue it's conservative agenda, which the party is often accused of doing, and be "pro-business". "Look," it can say, "We haven't done anything to make alcohol illegal. We are not Iran or Saudi Arabia." True enough, but they have managed to create a similar effect administratively.
Nation of Teetotalers?
The government has defended its actions, saying that the higher taxes and limits on advertising are meant to "lessen alcohol's incentive", however, statistics show that Turkey does not have a drinking problem: according to the World Health Organization's "European Status Report on Alcohol and Health 2010", Turkey has the second-lowest alcohol consumption levels among 53 European countries (second only to Tajikistan), with 1.4 litres of booze consumed per citizen in 2005 (the latest year for which data is available), an amount that has held steady for several years, the report notes. The report does point out, however, that unrecorded alcohol consumption in Turkey could push this number up to 3.4 litres (I'm looking at you, southeastern Turkey).
But I don't think that the AKP can point to statistics like those above and say, "See? Our limits on advertising and incredibly high taxes stem the tide of alcoholism among young Turks." Instead, I think traits inherent in Turkish culture actually do that for them.
Turks are, generally and across the board, not big drinkers. The majority of Turks who do drink booze prefer beer, with the average person consuming 0.8 litres in 2005, or spirits, at 0.5 litres per person. And wine -- well, wine is hardly drunk at all, totalling an average of 0 litres per person. Considering that most Turkish wineries can't even make it properly and it doesn't pair well with traditional Turkish foods, this is hardly surprising.
The Turkish Green Crescent, which was founded in 1920 to combat drug and alcohol consumption -- so, yeah, it has no underlying agenda here! -- has recently announced that it will create a city-by-city map of alcohol and tobacco consumption in Turkey, but this information is not yet available.
So this yabancı totally doesn't buy AKP's argument that their efforts over the past decade have stemmed the tide of would-be alcoholics, and in fact, would argue that the further taxes rise, there is an increased probability that an illegal alcohol trade will take off.
Foreign Interest
Despite the increasingly high taxes and advertising bans, global alcohol companies still have their eyes on the Turkish market, many of which are eager to see the country's young and educated population spend some of their disposable income on booze.
The Wall Street Journal reported in November 2010 that Bacardi, for example, plans to increase its marketing investment in Turkey in 2011 some 20-30% over five years. And Pernod Ricard was expected to add 15 new people to its offices in 2010, with most new hires in marketing and sales.
Indeed, as the Wall Street Journal article points out and I have experienced firsthand, the majority of work that needs to be done by foreign alcohol companies looking to make a profit in Turkey is basic education on how to drink alcohol and how to make mixed drinks. Case in point: ask any bartender in Istanbul to make you a martini and you will get a glass of vermouth, for which you pay about 25 TL. It's a far, far cry from a "Grey Goose martini, dry, a little dirty", which is what I always ask for and have to instruct the bartender how to make.
For the Love of Money
If there's one thing the AKP loves more than curbing Turks' freedom, it's money. But focusing on alcohol taxes alone to meet budget goals is a surefire way to see revenue drop from other sectors. For example, the sale of alcohol is essential for the tourism industry. Selling booze is one of the few ways that the country's hotels and restaurants can make a profit. Dry hotels simply can't compete with those that serve alcohol and they face a 30% decline in potential profit even before opening. I've been to several touristy restaurants along the Aegean and Mediterannean coast where a lunch buffet is 5 TL but a glass of beer is 8 TL. Clearly, they're making a profit on the beer, not the food.
But why should the AKP care about that when it aims to raise 61.1bn TL from the ÖTV in 2011, compared to 41.3 billion TL from the tax in the first nine months of 2010, according to Bloomberg. Income tax receipts in 2011, by comparison, are forecasted to be only 47.3bn TL.
The Final Note
There are lots of problems in Turkey, and honestly, the price of alcohol does not top the list. But I see this situation as part of a much larger problem here: that of the AKP attempting to change social and cultural behavior by instituting taxes and curbing freedoms. From police raids on restaurants where alcohol is sold in the presence of children to select municipalities raising taxes for businesses that sell booze, there is now a much higher price to pay for enjoying your evening martini.
And what is wrong with that, really? Responsible adults like myself who choose to have a drink after work are punished because we choose to live a different lifestyle, because we are not always satisfied with çay and mercimek.
It doesn't matter what you do: If you drink, the AKP is happy because you pay taxes and help salvage the national deficit; if you don't, the AKP is still happy because they don't want anybody drinking to begin with. If you leave Turkey because all this bullshit pisses you off, then the AKP really wins.
In response to the most advertising restrictions, a Facebook group called "AKP'ye İçiyoruz" ("Let's Drink to the AKP!") was created as a way to raise awareness of the AKP's actions and to encourage everyone on Saturday, Jan. 29 to have a drink or several.
It's a great idea to stick it to AKP by drinking ourselves silly.
But guess who will ultimately benefit from us buying all that booze?
The AKP.
