Turkish Grocery Giants Face Curbs to Save Firms Being ‘Crushed’

(Bloomberg) -- Turkish authorities are weighing imposing restrictions on what top grocery chains can sell after an outcry from smaller firms who say they’re being crushed by larger rivals.

Small and mid-sized stores owned by the country’s supermarket chains won’t be allowed to sell cigarettes, furniture, home appliances and electronics items, according to a preliminary Trade Ministry study seen by Bloomberg.

They’ll also have to allocate at least 1% of store space to items marked with a location of origin, which generally means goods produced by local farmers or small manufacturers. Grocery chains won’t be able to open Sundays until 11 a.m.

Earlier this week, Gursel Baran, head of the Ankara Chamber of Commerce, urged chains to refrain from selling non-food items at least on weekends. In a written statement, Baran said members of the chamber were being “crushed under the disproportionate power” of big retailers.

The antitrust authority found this month that the dominance of top retailers, including BIM, A101 and Migros, in the fast-moving consumer goods market has been rising. The authority suggested the establishment of an independent board to enforce competition and protect suppliers against the companies.

If the proposals become law, listed food retailers would be negatively impacted, Global Securities’ head of research Burak Salman wrote in a note. Burak Isyar, head of research at ICBC Yatirim, estimates that cigarettes make up about 10%-12% of total sales at Migros and Sok Marketler stores.

Migros declined as much as 2.8% to 44.7 liras on Thursday in Istanbul. BIM fell as much as 1.3%, while Sok Marketler slumped 4%.

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