Ülker Bisküvi (UELKY) Trades Price for Promotions in Turkey

Ülker Bisküvi (UELKY), Turkey's largest biscuit and chocolate maker, told investors on its FY2026 second-quarter earnings call on 19 August 2026 that the Turkish market would not let it raise list prices in line with inflation, so it held volume with promotional discounting instead — and margins fell in both the domestic and the international segment [1]. This is one company's disclosure, not a cross-confirmed industry pattern.

Why a Turkish snack maker can no longer raise list prices

Ülker holds a 34% share of the Turkish biscuit and chocolate market and also sells into Central Asia, the Middle East and North Africa [1]. Through the high-inflation years of 2022 to 2024 it passed rising input costs on by repricing frequently and steeply. On its May 2026 call management said the environment has changed: inflation is coming down, large price increases are harder to push through, and shoppers are more sensitive to what they can afford [2].

Turkish food inflation is still running near 30% while purchasing power has not caught up, so the only thing that matters to the shopper is the absolute price of a pack on the shelf. Competition has shifted from list price to promotional depth. Ülker matched the discounting and kept both volume and share, but collects less cash per ton of product sold [1]. Turkey also applies hyperinflation accounting (IAS 29), which restates last year's revenue base upward by roughly 32% annual inflation — far more than realized prices actually rose, which widens the reported year-over-year decline [1].

Volume grew while revenue per ton and segment margins fell

Consolidated volume rose 1.3% to about 163,000 tons, yet reported revenue fell 11.4% to TRY 27bn. Turkish domestic volume fell 1.7% while domestic revenue fell 13.1%, and the domestic EBITDA margin went from 16.1% to 12.7% [1]. Management attributes that gap to promotional spending.

The international side is starker. Central Asian volume grew 5.6%, but the international EBITDA margin dropped from 14.6% in the first quarter to 5.2%. Asked about that line, management put fierce competition and heavy promotional activity in Kazakhstan first, ahead of the effect of the Middle East war [1][2]. The same rule now operates in two geographies for different reasons: at home it is the shopper's wallet, abroad it is a competitor's promotional push.

The guidance shows the same thing. After Turkey's central bank raised its inflation estimate by at least 2 percentage points, the company cut its 2026 net sales outlook from flat to a low-single-digit decline while leaving volume guidance unchanged and reaffirming a full-year EBITDA margin target of 13.5% plus or minus 1.5 percentage points [1]. A higher inflation estimate producing a lower revenue outlook is an artifact of the restated base, not of demand.

Pricing power moves from the shelf tag to the promotional budget

Once a manufacturer stops earning through list price, that money moves into promotional budgets, and most of it is paid to the channel as advertising slots, delivery and campaign subsidies. The price realization given up at the factory can be recaptured downstream by platforms in another form.

The cost side depends on cocoa. Ülker's inventory was still bought at last year's highs, and management concedes there is a natural lag between procurement, inventory consumption and P&L recognition, so lower purchase prices have not yet reached cost of goods [1]. On 18 August 2026, the day before the call, cocoa futures moved back above $6,000 per metric ton, a new high since January [4].

One boundary is worth keeping. This is not a Turkey-wide condition. Six days earlier, Turkcell reported positive real growth in the same inflation and credited its own pricing discipline [3]. The metric to watch next is whether the domestic EBITDA margin returns to the full-year guidance range.

Companies exposed to the same mechanism

• Lotte Wellfood (280360.KS): It owns roughly 95.57% of Lotte Rakhat, the established Kazakh confectioner [6], which places it inside the very market Ülker named for escalating promotions; the pressure lands on its overseas confectionery margin.
• Kaspi.kz (KSPI): 53% of its GMV comes from Kazakhstan and 47% from Turkey, and second-quarter value-added services such as delivery and advertising grew 49% in constant currency [5], so part of the budget manufacturers shift out of list price flows to platforms like this one.
• Fuji Oil Holdings (2607.T): It makes cocoa butter equivalents and owns the industrial chocolate processor Blommer, with CBE volume up 7% year over year in fiscal Q1 2026 [7]; cocoa costs that cannot be passed to shoppers turn into demand for reformulation.

Sources

[1] Drillr · Ülker Bisküvi (UELKY) · 2026-08-19 · Earnings call

"Campaign-driven sales and value-focused offerings help maintain volumes and competitiveness, but reduce net revenue per ton and precious margins."

[2] Drillr · Ülker Bisküvi (UELKY) · 2026-05-12 · Earnings call

[3] Drillr · Turkcell · 2026-08-13 · Earnings call

[4] Barchart · Cocoa futures · 2026-08-18 · News · https://www.barchart.com/story/news/3910572/favorable-west-african-weather-weighs-on-cocoa-prices

[5] Drillr · Kaspi.kz (KSPI) · 2026-08-10 · Earnings call

[6] Wikipedia · Lotte Rakhat · 2026-08-20 · Company profile · https://en.wikipedia.org/wiki/Lotte_Rakhat

[7] Fuji Oil Holdings · Fiscal Q1 2026 results summary · 2026-08-12 · Company disclosure · https://finance.biggo.com/news/JP_2607.T_2026-08-07

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