Türkiye’s leading footwear manufacturers and retail brands, representing 80% of the organized shoe market, are calling for the elimination of additional import duties on raw materials. They are also urging the government to take stronger measures against the $1 billion annual loss caused by unregistered production.
At a recent meeting in Istanbul, industry leaders discussed high input costs, illegal production, and potential solutions. The event, hosted by Türkiye Footwear Manufacturers Association (TASD) President Berke İçten, was attended by United Brands Association (BMD) President Sinan Öncel, among other key figures.
Urgent Measures Needed to Revive the Footwear Sector
During the meeting, participants emphasized that Türkiye’s footwear industry is struggling to survive due to import taxes exceeding 100% and the impact of illegal production. To revitalize exports and boost sales to tourists, they called for immediate action on two key issues:
- Eliminate additional import duties on raw materials and semi-finished products. A separate incentive mechanism can be developed for sub-industries if necessary.
- Strengthen the fight against unregistered and counterfeit shoe production, which has reached 200 million pairs annually.
TASD President Berke İçten: “Footwear Industry Ends 2024 with a $550 Million Trade Deficit”
Speaking at the meeting, TASD President Berke İçten warned that high input costs have significantly weakened Türkiye’s global competitiveness over the past two years. He highlighted a 19.6% decline in footwear exports by volume and an 8.4% drop in value in 2024. Meanwhile, shoe imports surged by 39.6% in volume and 21% in value.
“Just a few years ago, our footwear trade had a $500 million surplus. Now, we are closing 2024 with a $550 million deficit. Our costs have skyrocketed just as global demand has slowed. Meanwhile, exchange rates remain stagnant, making it difficult to price competitively,” İçten said.
He explained that footwear production involves around 50 different materials, many of which face high customs duties, increasing costs and reducing Türkiye’s competitiveness. Chinese manufacturers can source materials for $3.9 less per pair than Turkish producers, giving them a major advantage.
“We import raw materials and semi-finished products, add value through production, and then export the final product. Some materials are simply not produced in Türkiye or are too expensive domestically. If this issue is not addressed, finished shoe imports will increase even further.”
Illegal and Counterfeit Production Costs Türkiye $1 Billion Annually
In addition to high costs, unregistered and counterfeit production—known as “fake” shoes in the industry—creates unfair competition. İçten estimated that illegal shoe production in Türkiye has reached 200 million pairs annually, resulting in at least $1 billion in lost government revenue.
“Due to unregistered production, Türkiye loses at least $1 billion each year. We are also seeing significant declines in legal production and employment. In Istanbul’s major footwear production zones, electricity consumption dropped by 25% last year, signaling a 25% decrease in production and the loss of 60,000 jobs.”
BMD President Sinan Öncel: “High Import Taxes Harm Inflation Control Efforts”
BMD President Sinan Öncel warned that labor-intensive industries like footwear are struggling to survive due to high costs and excessive import duties on raw materials. He also pointed out that rising costs make Turkish footwear less competitive compared to European markets.
“When you factor in rent and other expenses, we are producing the same products at higher costs than many European countries. Additionally, brands importing finished shoes face reference pricing rules that double costs. This makes competitive pricing impossible,” Öncel stated.
He emphasized that foreign tourists’ card spending in Türkiye has dropped significantly. While foreign spending accounted for over 10% of total card transactions a few years ago, it fell below 5% in 2024.
“Türkiye’s raw material and intermediate goods prices are far above global levels, harming not only main industries but also the entire economy. Eliminating customs duties on these imports would boost the sector, support domestic production, and contribute to inflation control. If no action is taken, major brands operating internationally could face irreversible consequences.”
Source: Patronlar Dünyası/ Prepared by: İlayda Gök