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Anadolu Efes Slumps on Alcohol Ad Ban Proposal: Istanbul Mover

Anadolu Efes Biracilik & Malt Sanayii AS (AEFES) was set for the lowest close in seven weeks on speculation a proposal to ban alcoholic advertising will hurt profit at Turkey’s biggest brewer.

The shares fell 2.1 percent to 27.9 liras at 4:28 p.m. in Istanbul, set for the lowest since March 26 and bringing a four-day slump to 11 percent. About 235,413 shares were traded, more than 70 percent of the stock’s three-month daily average. Turk Tuborg Bira ve Malt Sanayii AS (TBORG), another Turkish beer-maker, retreated 1.6 percent. The benchmark Istanbul Stock Exchange National 100 (XU100) index advanced 0.1 percent.

Lawmakers belonging to the ruling Justice and Development Party proposed that the advertisement and promotion of alcohol be banned in a draft law submitted to the Turkish parliament on May 10. The legislation includes recommendations for health warnings on such products, as well as the imposition of fines on those who violate the ban. Marketers and producers will not be allowed to arrange and sponsor festivals, events and campaigns, the 32-article document proposes.

“The draft was perceived by investors as an indication that the government will be stricter in its fight against the use of alcohol,” Alper Ozdemir, an analyst at Oyak Securities in Istanbul, said in a phone interview today. “This adds insult to injury, coming after weak first-quarter earnings.”

Quarterly Results

Anadolu Efes last week reported first-quarter profit of 2.59 billion liras ($1.4 billion) from 103 million the year earlier, boosted by a one-time gain of 2.72 billion liras after the consolidation of operations at unit Coca-Cola Icecek AS (CCOLA), according to the company’s financial statement. Excluding the gain, the results implied a quarterly net loss of 130 million liras, the first in the past four years, Ozdemir said in a report on May 9, lowering the shares to underperform, or the equivalent of sell, from market perform.

Anadolu Efes shares have gained 8.6 percent this year, trailing the 15 percent advance of the Borsa Istanbul index. One analyst recommends investors buy the shares, while 18 say hold and five say sell, according to data compiled by Bloomberg.

To contact the reporter on this story: Taylan Bilgic in Istanbul at tbilgic2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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