Coca-Cola Icecek AS (CCI) has lost market share in two of its biggest markets, i.e. Pakistan and Turkiye, amid calls to boycott Western products perceived to have ties with Israel, reported Bloomberg.
However, the product’s dominant position is likely to protect it from any long-term fallout from the prolonged conflict in Gaza, according to the report.
As per the report, CCI’s share of the Turkish market fell five percentage points to 54%, and its share of the Pakistan sparkling beverage market dropped four percentage points, according to data released last month by the company.
Declines were also observed in Kyrgyzstan, Jordan and Uzbekistan.
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CCI, a subsidiary of Anadolu Group, is a Turkish multinational beverage company which operates in Türkiye, Pakistan, Kazakhstan, Iraq, Uzbekistan, Bangladesh, Azerbaijan, Kyrgyzstan, Jordan, Tajikistan, Turkmenistan, and Syria. CCI produces, distributes and sells sparkling and still beverages of The Coca-Cola Company and Monster Energy Beverage Corporation, along with the production of fruit juice concentrate.
“Boycotts have had an impact evidently in these markets,” Hasnain Malik, head of equity strategy research at Tellimer Technologies Ltd, told Bloomberg.
“That creates a lasting opportunity for smaller, locally branded competitors, absent any change of popular perception about the incumbent.”
Global brands such as McDonald’s and Carrefour have also come under pressure from similar boycotts.
Coca-Cola Icecek has been impacted by ongoing macroeconomic pressures as well as the Middle East conflict, Chief Executive Officer Karim Yahi said in an analyst briefing last month.
“The overall operating environment remains fragile, largely due to the ongoing conflict in the Middle East and the increased competitiveness of local brands,” Yahi said during the analyst briefing session.
CCI’s net income dropped to 5.1 billion liras in the second quarter, compared to 7.3 billion liras in the same period of last year, a loss of over 30%.
However, despite the declining share, Bloomberg said that Coca-Cola still dominates markets across Central Asia and its neighbours, and overall volumes are growing.
“That’s likely to see the company weather the unpredictability caused by the Gaza conflict even as smaller, local brands like Cola Next in Pakistan and Mojo by Akij Food & Beverage Ltd. in Bangladesh eke out share at the margins,” read the report.
“Most people who wanted to boycott Western brands have already done so,” and consumers are likely to return when the conflict ends, Alex Dray, director of emerging markets research at Gimme Credit, told Bloomberg.
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