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Coca-Cola Icecek Faces Sales Decline in Turkey and Pakistan Amid Boycotts

Coca-Cola Icecek Faces Sales Decline in Turkey and Pakistan Amid Boycotts

Coca-Cola Icecek AS, a major bottling company, reported a substantial decline in sales across Turkey and Pakistan for the quarter ending September 2024. This drop has been largely attributed to widespread regional boycotts of brands with perceived connections to Israel amid ongoing Middle Eastern conflicts, according to Bloomberg.

The impact was immediate and substantial on Coca-Cola Icecek’s stock price, with shares plummeting 7.1% to 45.12 Turkish liras on Tuesday, marking the worst single-day decline since May 2023. The downturn continued on Wednesday, with shares dropping an additional 4.8%.

 

 

Financial Performance Below Expectations

In its quarterly filing, Coca-Cola Icecek reported a 61% decline in net income year-over-year, amounting to 5.17 billion Turkish liras ($151 million), missing analyst expectations of 5.72 billion liras. The company also revised its net-sales-revenue growth guidance downward, reflecting the challenges posed by the current volatile environment.

 

 

Broader Market Impact on Fast-Food and Beverage Brands

The ripple effect of these boycotts has extended beyond Coca-Cola to include American fast-food chains such as McDonald’s and KFC. These brands are experiencing similar declines in demand as many consumers in the Middle East, Asia, and Europe turn away from American retailers. This shift in consumption has been largely motivated by the geopolitical situation, with many consumers choosing to support local brands instead.

Onur Alturk, the CEO of Anadolu Efes, Coca-Cola Icecek’s parent company, commented on the challenging conditions, stating, “This quarter was shaped by a highly dynamic environment, yielding a mix of challenges in some markets and notable successes in others.” He emphasized Coca-Cola Icecek’s commitment to its long-term growth strategy, despite the quarter’s below-expectations performance.

 

 

Growth in Other Markets

Despite the downturn in Turkey and Pakistan, Coca-Cola Icecek reported a 1.3% increase in sales volume in other markets, led by strong demand in Iraq, Azerbaijan, and a recovering market in Kazakhstan. These markets have provided some stability for the company amid challenging times, helping to partially offset losses in other regions.

 

Future Outlook

As regional tensions continue to impact consumption habits, Coca-Cola Icecek may face ongoing challenges in regaining market share in Turkey and Pakistan. With volatile geopolitical factors influencing consumer sentiment and a challenging economic climate, Coca-Cola Icecek and other American-affiliated brands are expected to closely monitor their market positioning and consider strategies to adapt to the changing landscape.

 

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