Turkey's new year brings steep price hikes for cigarettes, alcohol

With President Erdoğan's decision, the Special Consumption Tax (ÖTV) on high-alcohol beverages has increased by 13%, and a price hike of 5-7 liras for cigarettes is expected in the new year.

Friday December 27 2024 01:48 am

Duvar English

With President Recep Tayyip Erdoğan's decision published in the Official Gazette, the fixed Special Consumption Tax (ÖTV) rates on alcoholic beverages have been increased by 13%, and a price hike for cigarettes has been also expected to be on the way.

Erol Dündar, President of the Association of Tobacco and Alcohol Retailers, announced that a price increase of 5 to 7 lira for cigarettes is expected in January. Cigarette pack prices has been varying between 60-90 liras.

Dündar on Dec. 26 said, "The price hike started as of today; (alcohol) companies will not wait for January.”

ÖTV on beverages with an alcohol content of 22% or more has been increased to 1,428 Turkish liras. Since July 3, 2024, this amount has been applied as 1,269 liras.

This increase refers to the ÖTV amount applied to 100% alcohol. For example, in rakı -a traditional alcoholic beverage popular in Turkey-, which has an alcohol content of 45%, the ÖTV amount for one liter increased by 71 liras, rising from 571 lira to 642 lira.

Since Value Added Tax (KDV) is also taken on ÖTV for many products, including alcoholic beverages, the total tax increase reached 86 liras.

Given that alcoholic beverages are typically sold in 70 cl bottles, the price increase on the shelf, especially for rakı, would be 60 lira if producers only pass on the tax hike without adding to their profit margin.

Thus, the price of a 70 cl bottle of rakı, which was sold for 925 liras until now, has risen to 985 liras, and with the potential costs reflected by producers, the price is expected to reach 1,000 liras.

With the new hikes, the price of one liter of whiskey, which was 1,290 liras, would reach 1.375 liras. In other words, at least 60 liras tax hike was imposed on 70 alcoholic beverages and at least 86 lira tax hike was imposed on 1 liter alcoholic beverages.

It has not yet been announced how much the price of low-alcohol beverages such as wine and beer would increase.

($1 = 35.22 liras)