(Bloomberg) -- A top executive at one of Turkey’s largest supermarket chains was forced to resign as head of an industry body after fiercely rejecting claims that retailers are responsible for the country’s soaring inflation.
Galip Aykac, the chief operating officer of BIM Birlesik Magazalar AS, quit as chairman and board member of the Food Retailers Association on Dec. 4, according to a statement on the group’s website. He apologized to Turkey’s Nationalist Movement Party -- allied with President Recep Tayyip Erdogan -- which had criticized him for the strength of his comments.
Those blaming companies for inflation of 84.4% are “immoral” and “insolent,” Aykac said at a retail conference in Istanbul on Nov. 30. Profit margins at organized retailers are at about 4%, he added, and “even if you give away all of that, inflation wouldn’t come down,” he said.
Discount grocers, including listed BIM, have long been accused by Turkish officials and pro-government media for raising prices for no good reason. Erdogan last month threatened companies with unspecified “steps” on top of administrative fines, while his ally, the nationalist MHP leader Devlet Bahceli, has alleged terrorist influence behind price gains.
The clashes reflect how food inflation that surpassed 102% in November has taken the center stage in politics ahead of next year’s elections. Price rises have this year reached their highest level since Erdogan took power almost two decades ago, after the president embarked on policies that prioritized cheap lending to corporates at the expense of currency and price stability.
The central bank completed an easing cycle last month even as inflation soared, cutting the benchmark rate by 1.5 percentage points to 9%.
Bahceli’s deputy, Semih Yalcin, targeted Aykac via Twitter on Dec. 1, saying his party would “break the hands” of those undermining people’s ability to make a living. Newspapers and websites reported over the weekend that a nationalist gang leader also threatened Aykac via social media.
Aykac refused to comment when contacted by Bloomberg by phone on Monday, saying the message he delivered was clear enough.
Turkey’s Inflation Finally Slows for First Time in Over Year
Shares in BIM, which operates almost 11,300 stores in Turkey and abroad, rose 103% in Istanbul this year, trailing the 166% gain in the benchmark stock index. The shares rose 1.2% to 124.5 liras as of 12:11 p.m. on Monday.
©2022 Bloomberg L.P.
BNN Bloomberg Picks
Opportunities in luxury retail: Three hot picks from John San Marco
Majority of Canadians determined to own a home despite affordability challenges: Survey
Started a side hustle? Seek expert advice to avoid tax season headaches
It's possible to have 'too much' in your RRSP: Tax expert
Food prices set to increase — again — as blackout on price hikes ends at some stores
WestJet temporarily suspends service from 3 Canadian cities to Europe