Coca-Cola Icecek AS, the bottler of Coca-Cola products in Turkey and several neighboring markets, reported a sharp decline in sales across Turkey and Pakistan for the third quarter of 2024. According to a filing by the company, sales volume fell by 12.2% in Turkey and a more significant 22.9% in Pakistan from July to September, compared to the same period last year. The drop is attributed to widespread boycotts against brands with perceived ties to Israel following the ongoing conflict in Gaza, Bloomberg reported.
The impact on Coca-Cola Icecek’s stock was swift and severe, with shares plummeting 7.1% on Tuesday to 45.12 Turkish liras, marking its steepest one-day drop since May 2023. The downward trend continued on Wednesday, with shares falling an additional 4.8%.
Broader Boycott Extends to Other US Brands
Coca-Cola Icecek is not alone in feeling the pressure. The regional boycott has extended to popular American fast-food chains, including McDonald’s and KFC, as consumers across Asia, the Middle East, and parts of Europe increasingly distance themselves from brands linked to the U.S. over their perceived affiliations with Israel. This trend has further disrupted the market for many Western companies operating in these regions.
Financial Impact and Revised Forecasts
The downturn in sales volume also translated into weaker-than-expected financial results for Coca-Cola Icecek. The company’s net income dropped 61% year-over-year to 5.17 billion liras ($151 million), falling short of analyst expectations, which had projected net income at 5.72 billion liras. In response to the challenging operating environment, Coca-Cola Icecek revised its net-sales-revenue growth outlook downward, reflecting the uncertainty and volatility in its key markets.
Positive Performance in Other Markets
Despite the setbacks in Turkey and Pakistan, Coca-Cola Icecek saw modest growth in other regions. Sales volumes increased by 1.3% overall, driven by stronger demand in Iraq, Azerbaijan, and Kazakhstan, signaling resilience in some parts of the company’s portfolio.
Coca-Cola Icecek’s recent performance underscores the complex challenges facing multinational brands amid shifting consumer sentiments and geopolitical tensions, with the full impact of these boycotts yet to be fully realized.
