Diageo under investigation in Turkey

Turkish authorities have launched an investigation into Diageo’s operations in the country, specifically over allegations its raki business took advantage of market dominance.

Diageo CEO Ivan Menezes has also had his pay packed slashed by nearly half due to the company's bad performance this year (Photo: Diageo)

Diageo CEO Ivan Menezes has also had his pay packed slashed by nearly half as a result of the company’s poor performance this year (Photo: Diageo)

Accusations made to Turkey’s Competition Authority were judged to be “serious and adequate” enough to begin an inquiry into Mey Icki, the Diageo-owned producer of local spirit raki, according to reports by financial news service Bloomberg.

The exact nature of the allegations is not yet clear, nor what the investigation will actually involve.

A Diageo spokesperson told the drinks business that the company “will carefully review the issues raised and respond to the Authority within the required time limit.”

In June last year, the same competition board fined the company 41.5m Liras (£9.6m) for breaching competition rules.

London-based Diageo acquired Mey Icki, Turkey’s largest raki producer, for £1.35bn in 2011. It was one of the company’s largest ever acquisitions and its first concerted effort to gain a foothold in a successful developing market, before focus shifted to India and China.

However, Turkey has proved difficult for Diageo, enacting alcohol advertising restrictions two years ago and its political leaders encouraging the majority muslim population to avoid drinking.

Diageo’s overall financial performance this year has been badly affected by its moves in developing markets, with flatlining sales and stagnant share prices leaving investors disappointed and analysts wary.

Organic sales growth was effectively unchanged, under-performing on analysts’ expectations of a modest 0.2% gain. Net sales fell flat in Europe, dropped by 1% in North America and Latin America and the Caribbean, and in Asia Pacific by 2%.

Africa bucked the trend, increasing its net sales by 6%, but from a low base, thus accounting for just £85 million in value sales.

Diageo’s CEO Ian Menezes had his pay packed slashed nearly in half this year, down from £7.3m to £3.9m, due to performance-related pay incentives yielding next-to-no return.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Brand Manager

Hatch Mansfield
Ascot, Berkshire

Southern Regional Account Manager

Speciality Drinks
England, UK

Northern Regional Account Manager

Speciality Drinks
England, UK

Awards Sales Executive – France

Decanter
London, UK

Fine Wine Buyer

FINE+RARE Ltd
London, UK

Sales Executive / Brand Ambassador

Elixir Distillers
London, UK

Brand Development Executive

Elixir Distillers
London, UK

Sales Administrator

Company details: Advised on application
London W1

London Account Manager

Speciality Drinks
London, UK

Sales Administrator Customer Service

Ellis Wines
Hanworth, Middx

Pink Rosé Festival

Cannes,France
7th Feb 2019

Wine Paris

Paris,France
11th Feb 2019

IBWSS UK

London,United Kingdom
11th Mar 2019
Click to view more

The Global Pinot Noir Masters 2019

Deadline : 7th January 2019

The Global Fortified Masters 2018

Deadline : 15th January 2019

Click to view more

Rioja Masters 2018

View Results

The Global Beer Competition

View Results

Click to view more