Turkey’s consumer inflation rate hit 8.5% in 2016, surpassing the government’s 5% target. A number of factors contributed to this outcome, including the dollar’s 20% rise against the Turkish lira. Such high inflation also has to do with alcoholic beverages and tobacco, which figure in the “pleasure-giving substances” category. The price increase in this category last year was nearly 32%, or 276% higher than overall consumer inflation. The category accounts for less than 5% of the total consumer basket, and although the exorbitant price increases likely only concern a limited number of people, in Turkey’s prevailing political climate, they speak of growing discrimination and intolerance against Turks who reject the conservative lifestyle the government promotes.
Statistics show that last year’s price increase for raki, the aniseed-flavored national booze, exceeded 25%. The increase for beer, the alcoholic beverage consumed most in terms of quantity, was 26%, and the increase for wine was 13%. Soaring prices for alcohol, however, have not been limited to 2016. Since the Justice and Development Party (AKP) came to power in November 2002, Turkey has seen stark price hikes in tobacco and alcoholic beverages. According to figures by the Turkish Statistical Institute, overall consumer prices increased 181% from 2003 to 2016, while the price of raki rose 500%. Yes, that's right — 500%. Beer and wine prices soared 423% and 235%, respectively, during the same period.
The minimum wage in Turkey today is 1,400 lira (about $370), meaning that minimum wage earners who want to buy a liter of raki a month need to allocate 8.5% of their salaries for its purchase. While 1 kilogram (2.2 pounds) of beef costs 40 lira and 1 kilogram of kashar cheese 25 lira, the price of 1 liter of raki stands at 117 lira. In short, raki, once an ordinary pleasure commodity, has become — or rather, has deliberately been made — a luxury product that most Turks in the low- and middle-income groups cannot afford.
The 500% increase in the price of raki over the past 14 years is exclusively an AKP accomplishment, as the price hikes stem from the special consumption tax (OTV) levied on alcohol and other products. Fifty-five percent of the price goes to the government budget as OTV. In 2016, the government generated about 8 billion lira in OTV from alcohol sales. OTV revenues from tobacco sales, meanwhile, were 30 billion lira, double the OTV generated from car sales.
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