Boycotts help send Turkey’s Coca-Cola sales down

Alamy/Danita Delimont

• Sales in Turkey down 12%
• Net profit for Q3 down 61%
• Sales elsewhere up 1.3%

A boycott of brands seen as supporting Israel in the Middle East has helped bring a double-digit drop in third-quarter sales in Turkey and Pakistan for a Coca-Cola subsidiary.

Coca-Cola Icecek (CCI), which is based in Istanbul, said sales in Turkey in Q3 fell 12.2 percent, while sales in Pakistan were down by 22.9 percent.

CCI said there was 1.3 percent volume growth in other international markets, driven by strong performance in Iraq and Azerbaijan, along with a recovery in Kazakhstan.

Karim Yahi, CEO of CCI, said the significant drop in numbers was due to the “cumulative impact of years of inflation combined with the spillover from the conflict in the Middle East”.

CCI’s overall sales fell 9.2 percent. Net profit for the quarter dropped 61 percent to $151 million (5.17 billion liras), below market estimates. 

The company revised its full-year sales volume guidance from “flat to low single-digit growth” to “low to mid single-digit volume decline”.

JP Morgan said it expected two more challenging quarters for CCI because of a slowdown in Turkey, Reuters reported. 

Coca-Cola Europacific Partners, a UK-based bottling unit of Coca-Cola, lowered its annual sales forecast this week in response to reduced demand for beverages in Europe, as well as weakness in Indonesia linked to the Middle East conflict. 

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US brands such as McDonald’s, KFC and Starbucks are among those facing declining sales in the Middle East and Asia over their perceived links to Israel and calls for a boycott since the start of the Gaza conflict.

Coca-Cola’s revenue in Europe, the Middle East and Africa fell 7 percent, while in the Asia Pacific region it dropped 4 percent, the company said last month. 

PepsiCo reported a 4 percent decline in sales in Africa, Middle East and South Asia. 

Ramon Laguarta, CEO of PepsiCo, said the Middle East had “been impacted by the geopolitical situation and I don’t think that’s going to change in the coming months.”

Americana Restaurants, the Middle East franchise owner for KFC, Pizza Hut, Krispy Kreme and Hardee’s, said this week that the company had weathered the worst of the boycott issues it faced this year, which led to a significant slump in its profit.

Its CEO, Amarpal Sandhu, said it was not predicting a “hockey stick recovery”, but did not expect results to deteriorate further.