United Arab Emirates Alcoholic Beverages Market Assessment, By Type [Beer, Wine, Spirits, Ciders and Flavoured Alcoholic Beverages (FABs), Others], By Alcohol Content [High, Medium, Low], By Packaging [Aluminium Cans/Tins, Pouch Packaging, Glass Bottles, Plastic Bottles, Others], By Category [Mass, Premium], By Distribution Channel [Convenience Stores, On Premises, Liquor Stores, Grocery Shops, Internet Retailing, Supermarkets, Others], By Region, Opportunities, and Forecast, 2016-2030F

The United Arab Emirates Alcoholic Beverages Market is projected to witness a CAGR of 8.1% during the forecast period 2023-2030. The market was estimated to be worth USD 10.08 billion in 2022 and is expected to reach USD 18.8 billion by 2030.

The United Arab Emirates' implementation of Islamic Sharia law forbids Muslims from producing and consuming alcoholic beverages. No matter where they are from, all Muslims who live in the country must abide by the law. However, the government has allowed non-Muslim expatriates to buy and consume imported alcohol, which is carefully regulated and only sold in specific areas, given the sizeable non-Muslim expatriate population living in the United Arab Emirates and their need for access to alcoholic beverages.

Despite being one of the most open countries in the Middle East, the country has a strongly traditional culture that is against intoxication. This mindset is generally following the Islamic values that guide its legal system. Nevertheless, attitudes regarding alcohol have changed recently, and non-Muslims can now drink more freely as long as they abide by a few guidelines.

Expanding Expat Population

The expat population brings diverse drinking preferences, influenced by their respective cultures, traditions, and backgrounds. This diversity drives the demand for various alcoholic beverages, including different types of wines, spirits, beers, and cocktails. The market responds to this demand by offering a diverse range of products to cater to the preferences of the expat community. A large expat population in the United Arab Emirates fosters cultural exchange and exposure to different drinking customs and traditions. The expat population even surpasses the Emirati population in the country. While the population of the expats is 9 million there, the Emirati population is only 1.17 million. Expatriates often introduce their native alcoholic beverages to the local market, creating opportunities to introduce new brands and flavours. This exchange contributes to the growth of the alcoholic beverages market and encourages innovation and diversification in the product offerings. The expanding expat population influences the alcoholic beverages market through diverse drinking preferences, cultural exchange, and exposure to international brands. This demographic segment continues to shape the market and create opportunities for the industry to cater to the needs and preferences of a global consumer base.

Tourism and Hospitality Sector

The tourism and hospitality sector in the United Arab Emirates significantly drives the demand for alcoholic beverages. The country attracts millions of tourists from around the world each year, and the hospitality industry, including hotels, restaurants, bars, and entertainment venues, contributes to the consumption of alcoholic beverages as the country is home to numerous luxury hotels and resorts that cater to both business and leisure travelers. From January to April 2023, 6.02 million individuals traveled to Dubai. These establishments often have multiple restaurants, bars, and lounges that offer a wide selection of alcoholic beverages.

The availability of diverse beverage menus, including wines, spirits, cocktails, and specialty drinks, enhances the overall guest experience and contributes to the consumption of alcoholic beverages. Many restaurants, especially those in tourist destinations like Dubai and Abu Dhabi, have extensive beverage menus that include alcoholic options. The country also has a thriving nightlife scene with numerous bars, lounges, and nightclubs, further driving the market's growth.

Government Regulations

The UAE requires establishments that serve or sell alcoholic beverages to obtain the appropriate licenses. This includes hotels, restaurants, bars, clubs, and other designated venues. These licenses ensure compliance with regulations and allow for the legal sale and consumption of alcohol within approved premises. Alcoholic beverages cannot be bought, owned, or consumed by anybody under 21. The residents can apply for personal alcohol permits to purchase and possess alcoholic beverages for personal use. Importing and exporting alcoholic drinks are subject to regulations and customs procedures.

There are restrictions on the quantity of alcohol that can be brought into the country for personal use, and individuals must comply with customs regulations when traveling with alcoholic beverages. Alcohol consumption is prohibited in public areas, including streets, parks, and beaches, unless it is within designated areas approved by the relevant authorities. Violations of these regulations can result in fines or legal consequences. During the holy month of Ramadan, there are additional regulations regarding the sale and consumption of alcohol. Non-Muslim residents and tourists can typically consume alcohol in licensed venues, but it is important to respect local customs and sensitivities during this time.

Easing of Restrictions

The United Arab Emirates has allowed the establishment of licensed retail outlets, such as specialized alcohol shops, where individuals can purchase alcoholic beverages for home consumption. This has increased the availability and convenience for consumers. The country has designated licensed hotels, restaurants, and bars where alcohol can be legally sold and consumed. This allows visitors and residents to enjoy alcoholic beverages while dining out or socializing in these establishments. The government has streamlined the licensing process for establishments serving alcohol, making it easier for businesses to obtain the necessary permits. This has encouraged more establishments to offer alcoholic beverages, increasing market growth. In January 2023, the country even announced eliminating 30% alcohol sales tax to boost tourism.

Social Events and Festivals

Social events and festivals provide opportunities for individuals to come together and celebrate, often accompanied by the consumption of alcoholic beverages. Whether it's weddings, parties, music festivals, sporting events, or cultural celebrations, these occasions create a higher demand for alcoholic drinks as people socialize and enjoy themselves. Alcoholic beverage brands often sponsor or participate in social events and festivals in the country. They leverage these opportunities to showcase their products, create brand awareness, and engage with the target audience. By aligning themselves with popular events, these brands can enhance their visibility and influence consumer preferences, ultimately driving market growth.

The country’s duty-free shopping facilities, particularly at airports, cater to travellers seeking to purchase alcoholic beverages before departing. The presence of duty-free outlets offers convenient access to a wide range of alcoholic products, attracting both tourists and residents looking to purchase these beverages at more competitive prices.

Impact of COVID-19

In response to the pandemic, the United Arab Emirates implemented strict measures, including temporarily closing bars, clubs, and restaurants. This resulted in a significant decline in on-premise alcohol consumption, as these establishments could not operate or had limited operations during lockdowns and restrictions. The country is a popular tourist destination, and the decline in international travel due to travel restrictions and lockdown measures directly impacted the demand for alcoholic beverages in hotels, resorts, and entertainment venues, leading to a decline in sales. COVID-19 caused disruptions in global supply chains, impacting the availability of alcoholic beverages in the country. Import restrictions, logistical challenges, and temporary closures of production facilities affected the distribution of alcoholic products, leading to potential shortages and limited product variety in the market.

With the closure or limited operations of bars and restaurants, there was a shift in consumer behaviour towards off-premise consumption. To adapt to the changing circumstances, many alcoholic beverage retailers and suppliers in the UAE expanded their online presence and introduced delivery services. The pandemic brought about changes in consumer preferences and behaviours. Some consumers became more health-conscious and focused on wellness, leading to increased interest in low-alcohol or non-alcoholic alternatives. This shift in preferences influenced the demand for specific alcoholic products in the market.

United Arab Emirates Alcoholic Beverages Market: Report Scope

“United Arab Emirates Alcoholic Beverages Market Assessment, Opportunities, and Forecast, 2016-2030F”, is a comprehensive report by Markets and Data, providing in-depth analysis and assessment of the current state of affairs of the alcoholic beverages market in United Arab Emirates, industry dynamics and challenges. The report includes market size, segmental shares, growth trends, COVID-19, opportunities, and forecasts (2023-2030). Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.

In this report, United Arab Emirates Alcoholic Beverages Market has been segmented into the following categories:

1.       By Type

1.1.    Beer

1.2.    Wine

1.3.    Spirits

1.4.    Ciders and Flavoured Alcoholic Beverages (FABs)

1.5.    Others

2.       By Alcohol Content

2.1.    High

2.2.    Medium

2.3.    Low

3.       By Packaging

3.1.    Aluminium Cans/Tins

3.2.    Pouch Packaging

3.3.    Glass Bottles

3.4.    Plastic Bottles

3.5.    Others

4.       By Category

4.1.    Mass

4.2.    Premium

5.       By Distribution Channel

5.1.    Convenience Stores

5.2.    Hotels/Restaurants/Cafes

5.3.    On Premises

5.4.    Liquor Stores

5.5.    Grocery Shops

5.6.    Internet Retailing

5.7.    Supermarkets

5.8.    Others

6.       By Region

6.1.    Abu Dhabi

6.2.    Dubai

6.3.    Sharjah

6.4.    Ajman

6.5.    Umm Al-Quwain

6.6.    Fujairah

Key Players Landscape and Outlook

The United Arab Emirates alcoholic beverages market is dynamic and features a mix of local and international players. It is anticipated to keep expanding in the upcoming years. Factors such as population growth, tourism, and evolving consumer preferences are likely to drive the demand for alcoholic beverages. However, it's important to consider that various factors, including government regulations, economic conditions, and evolving consumer trends may influence the market. The country also has a growing craft beer scene, with several local breweries emerging in recent years.

Key Players Operating in the United Arab Emirates Alcoholic Beverages Market

·         William Grant & Sons Group

·         Diageo plc

·         Pernod Ricard SA

·         Bacardi Limited

·         Brown-Forman Corporation

·         LVMH Moët Hennessy Louis Vuitton S.E.

·         Ken Forrester Wines

·         Chateau Ste. Michelle

·         MacDonald & Muir Limited

·         Heineken N.V.

Markets and Data’s reports answer the following questions:

·         What is the current and future market size of the product/service in question globally or specific to different countries?

·         How are the markets divided into different product/service segments and each segment's market size and growth? 

·         What is the market potential of different product segments and their investment case?

·         How are the markets predicted to develop in the future and what factors will drive or inhibit growth?

·         What is the business environment and regulatory landscape specific to the product/service?

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