Identifier
Created
Classification
Origin
05ISTANBUL357
2005-03-04 07:44:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Istanbul
Cable title:  

INFORMAL ECONOMY TURNS DEADLY AS 10 TURKS SUCCUMB

Tags:  ECON ETRD EFIN TU 
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UNCLAS ISTANBUL 000357 

SIPDIS

SENSITIVE

STATE FOR E, EUR AND EB
TREASURY FOR OASIA - MILLS
NSC FOR BRYZA

E.O. 12958: N/A
TAGS: ECON ETRD EFIN TU
SUBJECT: INFORMAL ECONOMY TURNS DEADLY AS 10 TURKS SUCCUMB
TO COUNTERFEIT RAKI


Sensitive but Unclassified - not for internet distribution.

UNCLAS ISTANBUL 000357

SIPDIS

SENSITIVE

STATE FOR E, EUR AND EB
TREASURY FOR OASIA - MILLS
NSC FOR BRYZA

E.O. 12958: N/A
TAGS: ECON ETRD EFIN TU
SUBJECT: INFORMAL ECONOMY TURNS DEADLY AS 10 TURKS SUCCUMB
TO COUNTERFEIT RAKI


Sensitive but Unclassified - not for internet distribution.


1. (U) Summary: The problem of counterfeiting in Turkey took
a new and deadly turn this week as ten Istanbul residents
died from alcohol poisoning after drinking counterfeit raki.
Another forty remain hospitalized here, several in critical
condition. The homemade brew, some of which was produced in
a garage in the Istanbul district of Bayrampasa, contained
two to three hundred times the permitted level of methyl
alcohol. The search for the contraband liquor continues
throughout Turkey, with police as far afield as Antalya
reporting discovery of thousands of bottles. Industry
officials, who are bracing for a temporary decline in
consumption of Turkey's national drink, blame high alcohol
taxes for the deaths, warning that "such problems will
continue" as long as taxes remain so high. End Summary.


2. (U) Deadly Brew: The problem first emerged over the
weekend in Istanbul, as dozens of local residents checked
into a number of local hospitals complaining of headaches and
dizziness after consuming raki over the weekend. Within
hours, several victims had died, and by March 3 the total
death toll stood at 10, with another forty people in the
hospital. Authorities quickly discovered that those affected
had imbibed counterfeit raki, some of which contained two to
three hundred times the permitted level of methyl alcohol.
Investigators continue to probe the source of the counterfeit
liquor, which was apparently packaged with the name of a
leading Turkish brand (Yeni Raki),and was even tagged with
the appropriate excise tags. News reports indicate that a
quantity of such tags, perhaps totalling as many as half a
million, were stolen earlier in the year in Izmir. Some of
the illicit alcohol was apparently produced in a still in a
garage in the Istanbul district of Bayrampasa, where nine
people have been arrested. Additional stills have been
discovered in Hendek in Sakarya (to the northwest of
Istanbul),and as far away as Malatya in eastern Turkey. A
large quantity of the counterfeit alcohol was found to be en
route from Istanbul to points as far away as Antalya.


3. (U) High Taxes: Industry officials ascribe the problem to
the high level of alcohol taxation in Turkey, noting that of
the 22 new Turkish lira (YTL) a consumer pays for a standard
bottle of Raki, 15 YTL go towards the various taxes that are
imposed upon it, including value-added tax (KDV) and special
consumption taxes (OTV). The CEO of Mey Icki, Galip
Yorgancioglu, which purchased the state alcohol monopoly's
raki division last year, noted that the government has raised
OTV taxes four times in the last two years, and that he and
other producers warned after the latest increase that
counterfeit production would inevitably increase. Seventy
percent of the price of raki goes towards such taxes, he
added, characterizing this as an "attractive target" for
counterfeiters.


4. (SBU) Comment: Raki consumption is a favorite national
pastime here, whether accompanying meals or serving as the
lubricant for conversations that extend well into the night.
This week's news, coming at a time when Turkish officials
have been highlighting their success in fighting piracy in
other areas, serves as an unwelcome and deadly reminder of
the reach of illicit activities, and the continuing
distortions that characterize the Turkish system. Given the
need for the GOT to maintain a large primary surplus, tax
relief is likely not on the horizon (particularly in this
area, given the natural inclinations of an
Islamically-inclined government),but this week's tragedy
highlights the way in which legitimate activities can be
crowded out as unsavory operators seek to make a quick buck.
End comment.
ARNETT