Wine sector suffers from high tax rates

Turkey's wine sector faces difficulties due to the high tax rates and early payment due dates, according to an industry leader.

With wine prices hitting rock bottom during tourism season, payment due dates ranging between 60 and 90 days, as well as the value added tax and the private consumption tax constituting 70 percent of sales, the costs were pushing wine producers into debt with the banks, said Coşkun Güner, chairman of Turkey's Wine Producers' Association and board chairman of Sevilen Şarapları.

  “The high tax rates led us to call off investments,” Güner said. “We have not been investing for the past two years. How could you invest without sales and profit? Since the rise of the house wines' stamp tax, there has been a 50 percent decline in sales. This decline, however, has not been noticed due to the efficiency of the last tourism season.”

The private consumption tax, or ÖTV, rates needed to be lowered, said Güner. “If no precautions are taken, these taxes and sales prevention policies will turn Turkey, which is a homeland of wine, into a wine importer in 10 years.”

Güler also said precautions were needed to prevent unregistered trade, which still constituted 10 to 15 percent of the overall industry, he said.

“There are nearly 100 wine producers operating in Turkey. This year, we expect to produce 70 million liters of wine, up from last year's 30 million,” said Güner. “The number of workers in Turkey's wine industry is approximately 800,000, including their families. That is why the production of wine grapes, which is a high value added agricultural product, should be supported.

“Turkey's wine producers should be able to produce quality wines at low costs. That would enable them to become strong market players in the global market,” Güner said.