Coca-Cola Icecek AS, the Istanbul-based beverage company, reported a significant decline in sales in Turkey and Pakistan. The decline was attributed to regional calls for boycotts of brands perceived to have links to Israel amid ongoing Middle East conflicts and economic slowdowns, reported Bloomberg.
In a recent filing, the company disclosed that its sales volume for the September quarter dropped by 12.2% in Turkey and 22.9% in Pakistan compared to the previous year. This announcement led to a 7.1% fall in Coca-Cola Icecek’s shares, closing at 45.12 liras in Istanbul on Tuesday, marking the steepest decline since May 2023. The shares continued to slide, dropping as much as 4.8% on Wednesday.
The challenging operating environment is not unique to Coca-Cola Icecek. US fast food brands, including those owned by McDonald’s Corp and KFC Holding Co, are also facing difficulties across Asia, the Middle East, and parts of Europe. These challenges arise from consumer boycotts linked to the conflict in Gaza, prompting many Muslims in the region to alter their consumption habits and reduce demand for American fast food.
Coca-Cola Icecek’s net income for the quarter fell by 61% year-over-year to 5.17 billion liras ($151 million), missing analyst expectations of 5.72 billion liras, as compiled by Bloomberg. The company also revised its net-sales-revenue growth guidance downward.
“This quarter was shaped by a highly dynamic environment, yielding a mix of challenges in some markets and notable successes in others,” stated Onur Alturk, president of the Beer Group and CEO of Anadolu Efes, in the report. “While our consolidated performance came in slightly below expectations, we remain committed to our long-term strategy.”
Despite the setbacks in Turkey and Pakistan, Coca-Cola Icecek experienced a 1.3% increase in sales volume in other international markets, driven by strong performances in Iraq and Azerbaijan, as well as a recovery in Kazakhstan. The company continues to distribute beers and soft drinks across multiple countries, navigating a complex global market landscape.
