APPENDIX 11
Memorandum submitted by the Scotch Whisky
Association
CONCERNS OF
THE SPIRITS
INDUSTRY
The numerous barriers to trade facing UK produced
spirits such as Scotch whisky, gin and vodka are essentially a
consequence of Turkey's efforts to protect its national spirits
producer, Tekel. However, under the terms of the 1995 EU-Turkey
Customs Union Agreement, the trading conditions for EU spirits
in Turkey should be identical to those within the Single Market.
Turkey is considered to be a market of considerable
potential. With the barriers to trade, however, UK spirits exports
to the market are lower than they were before Customs Union entered
force. We therefore particularly appreciate you and your colleagues
raising our concerns during the visit of the Select Committee
on Trade and Industry to Turkey in November. You indicated that
the Undersecretariat of Foreign Trade had not been able to answer
some of the Select Committee's questions but had promised a written
response in due course. Has such a reply ever been received?
As you may be aware, both the SWA and the Gin
and Vodka Association are members of the European Confederation
of Spirits Producers (CEPS), the Brussels-based organisation which
represents all EU spirits producers. Through CEPS, we have established
excellent relations with the European Commission, which is also
fighting to remove the barriers facing our industry. Indeed, the
Commission has confirmed that their removal is its top trade priority
in Turkey. In addition, we are in regular contact with the DTI
and British Embassy in Ankara regarding the trade barriers. Both
have provided invaluable assistance and guidance in our efforts
to secure improvements in trading conditions.
One of the key areas of concern has been the
Monopoly Bill, which was intended to amend Turkey's Alcohol Act,
ostensibly to make it compatible with Customs Union. A Bill, which
had been around for several years, was finally adopted in January
2001. Although its scope and application are vague, the Bill introduces
further restrictions on the free movement of goods. Essentially
it introduces a threshold of 1 million litres: companies trading
more than this volume will be permitted to do so independently;
smaller companies will be obliged to channel their goods through
Tekel, ie the national production monopoly and a competitor organisation.
There are many questions as to how the new law
will operate in practice. The Turkish government has promised
its interpretation will be clarified through an "implementation
decree". They have also promised that the Commission will
be consulted over the provisions of this decree. Meanwhile, the
timing for this decree remains unknown.
The trade believes that if the decree allows
the new law to be interpreted in a wide manner, it may premit
them to trade more freely than at present. However, despite Turkish
government assurances regarding consultation, it is fair to say
that there exists a degree of scepticism that this process will
be meaningful!
Given the above, it would therefore be very
helpful if, in any contacts you may have with Turkish Government
officials, you were able to continue to press the case for an
improvement in trading conditions for UK spirits. In particular,
we would appreciate you urging them to introduce greater market
access through a generous interpretation of the threshold in the
recent law.
13 February 2001
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