Turkey’s food industry is facing a calamity

According to the report of the Tourism Restaurant Investors and Operators Association (TURYID), the number of people expected to lose their jobs in the sector due to the prolongation of the measures and the decrease in capacity is 700 thousand.  Turkey’s restaurants, bars and café houses have been closed to indoor service for over two months.

The owners of restaurants can only deliver takeaway service for the last two months within the scope of epidemic measures.  The industry  is waiting for  ‘good news’ from Ankara, which is yet to commit to a firm date for-reopening .

Speaking to Burak Coşan from Hürriyet, TURYID President Kaya Demirer explained the expectations of the sector as follows: “We expect the industry to see high demand after the expected reopening in March. The industry needs  a cash grant of 20 billion lira for the tax, Social Security Institution (SSI), restructuring, supplier payments of the enterprises until the opening so that the enterprises that will respond to this demand, have a sustainable structure and start to generate income for the public and create additional employment.

In addition, considering the turnover losses of the enterprises after the opening, the withholding, tax and SSI premiums should not be collected for six months. We urge the government to  delay the first instalments of restructured tax liabilities until June. It is important that loan debts to public banks are postponed for three to six months without adding interest. This will be an example for private banks. ”

According to the report shared by Demirer, the numbers in the food industry are as follows:

2 million people working directly in the food sector, which generated  135 billion Turkish lira turnovers in 2019, 56 billion lira annual value added, 14 billion lira annual VAT amount paid by the sector, 70 billion lira estimated contribution to the state through various taxes and levies.

The number of enterprises that will shut down if  establishments don’t open soon is 35 thousand, the average salary of the employees in the sector is 3 thousand 350 lira , the number of people expected to lose their jobs due to the extension of the measures and capacity decrease is 700 thousand, and 7 thousand businesses that restructured tax but are in danger of not paying.

The bad news is that according to a member of the National Science Council, which advises the Health Ministry on covid-19 measures, it is too early to even debate re-opening. President Erdogan, too, counselled patience to industry members, despite heavy lobbying, stating that the outbreak will return if restrictions are relaxed.

Finally, the demands of the industry regarding state aid are likely to be ignored, as the new economy czar Mr Lutfi Elvan is looking for ways to trim the deficit.

Along with outdoor dining, Turkey’s ma and pa grocery stores, civil aviation and if the outbreak is not suppressed, the huge tourism industry is in their last legs.

Translation: Selin Duyar

 

 

 

 

 

Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.