WE all know the north is a faker’s paradise. You want a really cheap Gucci handbag, Madam? No problem. A Rolex or an Aviator for ten euros, Sir? There you go! And almost any brand of fake jeans for a quarter of the price you would pay for originals. Perfect fit!
Then, when you are tired of shopping, you can stop for lunch at one of northern Cyprus’ most renowned eateries, like Kermiya Fried Chicken (KFC) and Pizza Hat. And on your way home, pick up a copy of Hollywood’s latest movie 2012 on DVD. Yes, it’s only been in the cinemas for a week, but we’ve had for more than a month. Welcome to north Cyprus!
For some, it appears the non-recognised status of the north provides a perfect environment for fakers, pirates and bootleggers to trade uninhibited by the so-called copyright police who have all but stamped out the phenomenon everywhere else in Europe. Although perhaps to a lesser extent than in the past, the breakaway state is laden with imitations of well-known products and labelling. With all this freedom, one can only wonder why one local businessman chose to call his hamburger restaurant Pizzy Burger.
Despite the unfortunate name, Mr Pizzy Burger may however be smarter than one might initially think. According to Turkish Cypriot lawyer Emine Erk, high profile companies have, despite the north’s ambiguous political status, already began moving against the copyright infringers.
When a clothing company in the north started producing copies of Levis’ jeans, a Levis company lawyer came to Cyprus and sued the illegal producers, Erk explains. The same thing, she says, happened with a company that produced chocolate under the name Cirakli but with the same packaging used by Cadburys. Again, Cadburys came to the north and sued the illegal producers.
The interesting thing about these cases is that in order to sue the pirate producers, the companies wishing to sue have to first register their companies at the company registry in the north, and then they have to sue them in the courts of the north.
“Many, many big companies have their companies registered here exactly for this purpose. It’s not the same as setting up here but it prevents others from using their name and copying their products,” Erk says.
She adds that despite the ‘pirate’ image the north has internationally “there is not total piracy or lack of rule of law here. In many ways we can be proud of a system that works,” she says, citing successful rulings against Turkish Cypriot copyright infringers.
One can assume, then, that it is only a matter of time before fakers, like Pizza Hat, Kermiya Fried Chicken and the supermarket near Famagusta called Tesko will disappear altogether.
But one has to then ask the question, what will these fakes be replaced by? Will northern Cyprus suddenly breed more original, local brands like Pizzy Burger? The answer is already on the streets, and it isn’t Pizzy Burger. Stroll along Dereboyu, probably north Nicosia’s closest thing to Makarios Avenue, and you will see the answer. Here, you can shop at Nike, Benetton and Sisley, to name a few. You can also drink coffee at Gloria Jean’s and Lavazza, and round off the experience with the surreal pleasure of eating at Burger City or Big Mac. More about the last two names later.
The casual shopper could be forgiven for being surprised that outlets such as Benetton appear to operate in a breakaway state, supposedly under international trade embargoes.
“The products we sell here are exactly the same as you get anywhere in the world. Everything we sell here is from Italy,” says Muharrem Ozseyfiler managing director of the firm that operates sister companies Benetton and Sisley in the north.
Ozseyfiler, who spent 22 years in the rag trade in the UK before returning to Cyprus, says he bought the franchise from a previous owner several years back and has been doing good business ever since.
“Our prices are five to 10 per cent lower than in Europe simply because we are priced in Turkish lira, and consumers like buying products that are well known. They see the difference in terms of quality,” he says.
But what about the international trade embargo that is supposed to prevent international companies from doing business with the north? Erk provides the answer.
She points out that while there is a trade embargo in the sense that airlines cannot fly into the north’s Ercan Airport, foreign companies are technically free to sell to the north and even operate franchises there – if they are willing to face the wrath of angry Greek Cypriot lobbyist. What is also inhibiting for foreign investment is the inherent political insecurity of the breakaway state and this, coupled with threats by the Greek Cypriot lobby that seeks out to inform potential investors of the illegality of north Cyprus, is what has stopped big business from moving into the north over the last three decades.
It is also significant that Greek Cypriot franchise owners can threaten to pull out of existing deals with foreign companies if they pursue links with north Cyprus. Although such a move could be construed as self destructive, it would not be unprecedented. When the HSBC bank set up in the north after buying out Turkish-owned Demir Bank, the Greek Cypriot government complained. The HSBC however, after deciding it had more important business interests in Turkey than in southern Cyprus, relinquished its business interests, not in north Cyprus, but in the Republic.
But HSBC so far represents an exception rather than the rule, and the vast majority of international companies, omnipresent elsewhere in Europe, remain conspicuous by their absence in the north.
“Non-recognition is always a fear factor. Big companies need to feel secure against a government so that if any government commits a wrong they can legally protect themselves. They need to feel secure that they are dealing with a reliable state that is subject to international law,” Erk says, adding that such “fear factors” are most effective when coupled with the Greek Cypriot lobby warning the companies of the “legal implications” of doing business in the north. The Greek Cypriots’ legal arguments, she says, “are helped by the fact that the best investments in the north are usually offered on Greek Cypriot lands”. It is worth noting that around 80 per cent of privately owned land is that abandoned by Greek Cypriots during the 1974 Turkish invasion.
But these “fears” have not stopped everyone, and one of the biggest surprises you’ll get in the north’s Dereboyu Street is the unlikely presence of Gloria Jean’s, a highly popular cafι that has branches in just about every major city in Europe, the States and its native Australia.
Kaan Kaner, managing director of the Kaner Group of Companies that owns the Gloria Jean’s franchise, believes that the fact Gloria Jean’s can now operate in the north comes as an indirect result of Turkey’s growing stature in international markets.
“Turkey is Gloria Jean’s’ biggest market after Australia and the US,” Kaner says, explaining how Turkey’s newfound strength in the market means large companies investing in Turkey are growing less likely to heed the complaints or warnings of Greek Cypriot lobbyists and businessmen about franchises and sub-franchises being set up in the north. And in the case of Gloria Jean’s, where the Australian mother company has invested directly in the north, nothing the Greek Cypriot owners of the same company’s franchise in the south, or indeed Greek Cypriot lobbyists, can say has resulted in a pullout.
But as in the HSBC story, Gloria Jean’s’ route to the north is rather exceptional, and while coming as an upshot of Turkey growing share of the market, it is hardly typical. Kaner explains why.
“Initially a Turkish company bought the rights to operate Gloria Jean’s in Turkey and north Cyprus, but then we bought the rights for north Cyprus from Turkey.” Kaner adds that at that time, no one in the south had applied the franchise for Cyprus.
Rights to operate a franchise in any particular geographical area are usually accompanied with a map, Kaner says. In most cases, this means that Cyprus is seen as a single geographical and political entity, and more often than not, Greek Cypriot businessmen have snapped up the rights before a Turkish Cypriot can make a move on buying them. However, in the case of Gloria Jeans, no one on the Greek side had applied for a franchise prior to Turkey’s application for Turkey and north Cyprus.
“Generally, the south gets the rights for the whole island, which means that by the time we apply, the rights are gone,” Kaner says, indicating that, along with trade embargoes, and the illegality and perceived risks of the north, this is one of the main reasons why one does not see many large companies operating in the north.
But among the numerous fakes and the growing number of ‘real’ companies in the north, there is yet another phenomenon even more surprising. Try a burger at the Big Mac restaurant at the northern end of Dereboyu Street and see if its taste does not bear as great a similarity to a McDonald’s burger as the great big M sign on the front of the restaurant does to those of McDonald’s restaurants across the globe. Then, if you can stomach it, do the same at Burger City at the other end of the street, but this time compare the burger to those you can buy at any branch of the worldwide chain Burger King. If there are differences, many agree they are only as great as you would expect to find in large franchised takeaways from different geographical locations. This is because most tend to use local raw materials.
Burger City manager Ufuk Erhanoglu insists his product is real.
“Elsewhere it’s called Burger King; here it’s called Burger City,” he said, adding only that Burger City operated under a franchise agreement headed by an Istanbul-based company called TAB Gida. Beyond providing me with this information, Erhanoglu was unwilling to discuss further how Burger King had managed to set up in the north.
The owner of Big Mac Ahmed Gazioglu was a little more willing to talk, but denied that his restaurant was McDonald’s in disguise – despite the similarities in taste, packaging, furnishings, presentation and the big M logo. Gazioglu invited us to try his burgers in order for us to draw our own conclusions about the origins of the product. We did, and found only slight differences between his product and one sold under the same name in the south’s Ledra Street branch on McDonald’s.
Needless to say, Renos Andreou, Purchase and Finance Manager for McDonald’s in the Republic, insists the Big Mac restaurant in the north is “phony”. McDonald’s international headquarters, meanwhile, were not immediately available to comment.
According to Kaner, the rights to McDonald’s and Burger King held by Greek Cypriot companies in the south cover the whole of the island, thereby prohibiting Turkish Cypriots or Turks from being able to buy up rights for the north. The rights are simply not available, but, as a way of getting around the problem, Turkish Cypriot companies can work alongside companies that hold the rights for companies in Turkey. This way, the products end up in the north, but not the names.
What is interesting is that Burger City has been operating for over a decade and Greek Cypriots are yet to succeed in closing it down. Big Mac, on the other hand, has been around for a mere couple of months. What will be interesting to see is whether the Greek Cypriot lobby and the McDonald’s and Burger King franchise holders in the south can take on the embargo busters in the north, and whether, if they do, they will succeed now that Turkey’s market share and influence has outstripped theirs.
