Diageo plc's (LON:DGE) Turkey-based spirits group Mey Icki under investigation.
Turkey's Competition Board has announced that it has opened an investigation into Diageo's (LSE: DGE) (NYSE: DEO.US) Turkish spirits group Mey Icki on the grounds that it "breached competition rules by preventing the sale of competitors' products in stores".
Diageo bought Mey Icki, the leading spirits producer and distributor in Turkey, from TPG Capital LP and local private equity group Actera in late 2011 for $2.1bn. Its key brand is Yeni Raki, while it also has a presence in the vodka, wine, gin and liqueur markets.
This is another blow to the multinational alcoholic beverages company, as it is still attempting to push through its £1.3bn majority stake in drinks giant United Spirits, after Indian authorities questioned whether a put clause in the agreement was compliant with local legislation. Officials between the two companies are set to meet this week.
Both developments are worth watching, as some analysts believe that the United Spirits deal is priced into Diageo's shares already -- while Mey Icki's revenues are already pumped into the group's stream, obviously -- and any serious hiccup could harm their value should the worst arise.
At 1,919.50p, Diageo's shares have increased more than 2.5-fold in the last five years from a low of 733p in 2009.
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> Sam owns shares in Diageo.