An economic look at the alcohol regulation

The alcohol regulation passed in Parliament last week drew reactions both from the political angle and from the perspective of freedoms. It was discussed mostly from the viewpoint of “a new intervention in lifestyle.”

When viewed from the perspective of individual rights and freedoms, it is obvious that the new arrangements introduced are far from “protecting youth from harmful substances.” Besides, the article added to the bill at the last moment that restricts the time of alcohol sales was like proof that the arrangement was passed hastily without adequate debate.

Prime Minister Recep Tayyip Erdoğan opposes the introduction of this as a “ban” and especially if this is explained in foreign countries as such, arguing that these were among restrictions practiced in developed countries, moreover that international restrictions were even harsher.

Consequently, he is opposing the dissertations of “intervention in lifestyle.”

It is being forgotten that besides the political side of the business there is also an economic side that requires serious assessment. The harm this arrangement would bring regarding tourism is not talked about much. It looks as if its harm to tourism has been eliminated with last-minute changes, but it is being feared that especially those municipalities that are close to the government will make seriously harmful decisions in the coming term. Even though tourism investors and managers do not raise their voices, they look seriously worried because of this regulation.

Besides, the bans on advertisements and promotions introduced for alcoholic drink producers will also bring some harm again from the economic point of view. The erosion printed media is suffering because of technological developments, and correspondingly the decrease in advertisement revenue will multiply with this arrangement. It is certain this will be a serious economic blow to the media economy. Also, several sports events and festivals that again have an economic side will obviously be damaged to a huge extent with the restrictions introduced.

Investment environment affected

However, the biggest economic blow the alcohol regulation will have to the economy will, I think, be regarding foreign capital. We know that foreign capital demands a reliable investment environment, where rules are shaped rationally and permanently. It also gives major importance to the protection of vested rights.

There Diageo, which is one of the biggest alcoholic drink producers of the world as well as the company that bought Turkey’s biggest rakı producer, Mey İçki, issued some statements before and after this arrangement. In the company statement issued after the arrangements passed in Parliament, the company said the harms that may be caused by incorrect consumption of alcohol may be tackled with a joint effort of the sector, state and third parties but this was not happening. Diaego said, “While we were buying Mey İçki in 2011, we did not only invest in a company that had strong alcoholic drink brands but also in a country that encouraged foreign investment.”

I think this sentence summarizes the situation from the point of view of foreign capital. In alcohol or any other sector, the investment environment is very important. We should not forget that we are a country that is bound to foreign capital to solve the unemployment and production problems.