Turkey: Turkish Competition Authority Investigation Into Poultry Production Sector

On August 11, Turkish Competition Authority announced that it has reached a verdict on its preliminary investigation into the poultry production sector, pursuant to complaints claiming abuse of Article 4 of Law 4054 On the Protection of Competition. TCA will investigate Turkish Poultry Meat Producers and Breeders Association (BESD-BİR), a sector association, along with 19 producers.

Poultry is the main source of meat consumed in Turkey, representing 61% share (23 kg) of 37 kg per capita meat consumption and is similar to the median of consumption levels in BRICS countries often take as benchmarks. In Turkey, consumption of meat is restricted by availability and not cultural or religious dietary restrictions unlike India and to some extent China, therefore it may be assumed that consumption should increase along with economic growth. Per capita poultry consumption has more than doubled (10.9 to 23.2 kg) since 2000, corresponding to 6% annualized growth. Some of that growth may be accounted for by the increased prevalence of supermarkets supplied by industrial production taking the place of local butchers supplied by small farms where recordkeeping may have been less than complete. However, Turkey's economic growth over that period is more likely to have been the main driver, indeed, growth in poultry consumption has slowed to 2.5% per year over the past five years, following a similar trend in per capita GDP.

While growth of domestic consumption has slowed down, exports have grown 150% since 2010. The sector did suffer a setback from the Russian ban on imports of Turkish produce following the November 2015 incident where a Russian military aircraft from Syrian airspace was shot down. Before the ban, sales to Russia represented 7% of total exports and it has been lifted in June.

Growth in GDP may account for growth in poultry consumption however, increased competition from discount supermarket chains may have an effect on market concentration. Chains are displacing standalone markets and butchers which may mean larger producers are taking over market share from smaller producers, leading to increased concentration and raising competition concerns. On the other hand, chains have greater market power and may be able to negotiate lower prices which may create greater incentives for producers to enter into prohibited agreements or practices.

At the end of June, customs tariffs on live cattle and carcasses were lowered, citing high market prices as the motivator behind the measure. If red meat prices fall following this measure, there should be some substitution effect lowering poultry consumption. Turkish Minister of Food, Agriculture and Livestock and Minister of Economy have spoken against high food prices and promised combative measures, including preventing market manipulation.

Producers subject to investigation:

* Ak Piliç Tic. Ltd. Şti.,
* As Piliç Gıda İnşaat Taşımacılık Ambalaj San. ve Tic. Ltd. Şti.,
* Bakpiliç Entegre Tavukçuluk A.Ş.,
* Banvit Bandırma Vitaminli Yem Sanayi A.Ş.,
* Beypi Beypazarı Tarımsal Üretim Pazarlama San. ve Tic. A.Ş.,
* Bupiliç Entegre Gıda San. Tic. A.Ş.,
* CP Standart Gıda San. ve Tic. A.Ş.,
* Civkur Gıda San. Tic. ve Paz. A.Ş.,
* Ege-Tav Ege Tarım Hayvancılık Yat. Tic. ve San. A.Ş.,
* Erpiliç Ent. Tav. Ürt. Paz. ve Tic. Ltd. Şti.,
* Garip Tavukçuluk Gıda ve Yem San Tic. A.Ş.,
* Gedik Tavukçuluk ve Tarım Ürünleri Tic. San. A.Ş.,
* Hastavuk Gıda Tarım Hayvancılık San. ve Tic. A.Ş.,
* Keskinoğlu Tavukçuluk ve Damızlık İşl. San. Tic. A.Ş.,
* Abalıoğlu Yem-Soya ve Tekstil Sanayi A.Ş.,
* Şahin Tavukçuluk Yem Gıda İnşaat San. ve Tic. A.Ş.,
* Şenpiliç Gıda San. A.Ş.,
* Tad Piliç Fenni Yem San. ve Tic. Ltd. Şti.,
* Yemsel Tavukçuluk Hayvancılık Yem Hammaddeleri San. ve Tic. A.Ş.

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