This dissertation aims to contribute to the field of economics of competitiorı policy by arıalyzing the dernand structure and ıhe market power in the Turkish beverage industry and in thc cola market in particular. First, a dernarıd system for the beverage products has been estimated by using a multistage Iinearized Almost ideal Dernand System (AIDS). Using the own-price elastieity of cola in a SSNIP test (Sınall but Significant Non-Transitory Increase in Price), it is shown that cola market consists of a distinct relevant procluct market. Then, the demand elasticities of cola products at brand and package Jevel have been estimated by the simple and nested logit models. Finally, the estimated demand elasticities of cola products lıave been used in measurirıg the degree of market power and predicting the effects of a hypothetical merger between Pepsi and Cola Turca by using a merger simulation technique. The results show that ali cola suppliers lıave Iarge price-cost margins for most of their products. Prices of the rnerging parti es increase in average by 15 - 21 % after the merger. Tlıe merger also causes the market price to increase by 16- 22% and consumer surplus to clecrease by nearly 8-10% in average. Finally, depending on these results, the thesis recoınmends a stricter merger control criterion than dominance criterion for competition policy in Turkey. Keywords: Almost ideal Demand System, Nested Logit, Market Power, Merger Simulation, Relevant Market Definition