Turkey Economy: Not Doing It The French Way

The passage by the French parliament of a bill criminalising the denial of the alleged genocide perpetrated in 1915 against Armenians living in the Ottoman empire, has produced a mixed response in Turkey which imports around US$5bn of French products annually, and where a number of major French companies have sizeable manufacturing operations.

Although the bill is unlikely to be passed by the French senate and become law, some official and non governmental bodies have urged a full-on boycott of French products. Notably though, government spokesmen including--quite uncharacteristically--prime minister, Recep Tayyip Erdogan, have been urging caution, mindful perhaps of the damage done to Turkey's image by a similar boycott in 2001 following the French parliament's initial description of the 1915 events as genocide, which saw the introduction of series of niggling restrictions on French products and French nationals.

Although there has been some talk in the media of a ban on the purchase of imported Peugeot vehicles for use as official vehicles, to date no formal statement has been issued. Similarly while the Radio and Television Supreme Council has recommended a boycott of French films by Turkish TV channels, it has no authority to introduce such a ban. Although this is not to say that individual channels will not choose to avoid screening French films.

The most strident calls for boycotts have emerged from Turkey's Consumers' Association, an NGO, which is thought to harbour left-of-centre and nationalist leanings. However, its initial call for a boycott of Total petrol stations was met with scorn from industry bodies which pointed out that the majority of 500 Total-branded stations were owner-operated franchises, and it is the owners rather than Total itself who will be harmed. This sentiment was echoed by Mr Erdogan, who has warned that boycotts may wind up hurting Turkish companies more than their French partners. However, the association still claims its boycott to have been a success, having caused a drop in sales of Total products of as much as 30% and has extended its boycott to include L'Oreal cosmetic products.

Notably however the Association has not called for a boycott of French brands manufactured in Turkey nor of French companies involved in joint ventures with Turkish companies, which include Lafarge (cement), Alcatel (telecoms), Peugeot, whose cars are made in Turkey under licence, and supermarket group Carrefour, as well as Renault and the Axa insurance group, who both have long running and highly successful joint ventures with Turkey's semi-autonomous military pension scheme Oyak.

Again, this is not to say that consumers themselves will not choose to boycott French products, indeed several French companies admit privately that they are extremely worried by the potential long term effect of the French parliament's decision. One company, Danone, which has extensive food processing operations in Turkey has begun collecting signatures calling for the law to be overturned. Inevitably though, as with the attempted 2001 boycott, any long term effects are likely to be mitigated by other more pressing issues, such as next year's presidential and general elections which will necessarily force any issue of boycotts far down the agenda.