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UAE and Qatar: Leading Wine Markets in the Arabian Peninsula

CONTENTS
Gulf Peninsula
UAE
Qatar
Route-to-Market
Our Score
48

Among the 6 countries of the Gulf Cooperation Council, 4 authorize the sale and consumption of alcoholic beverages in a regulated system: Bahrain, Qatar, United Arab Emirates (UAE) and Oman. The sales channel to individuals is generally made up of specialized stores, which are discreet and often require the presentation of a paying license. Alcohol is allowed in restaurants and hotels with licenses that offer a more upscale restaurant experience.

SEE THE DETAILED SCORE OF THE EMIRATI WINE MARKET ATTRACTIVENESS

What the four Gulf wine markets have in common:

  • A strong propensity for out-of-home spending (consumption: no outward window);
  • A significant marketing in airport stores. No sales in traditional supermarkets;
  • Markets that are still not very knowledgeable. Strong need for sommeliers;
  • Zero tolerance for drunkenness and a minimum age of 21 years to consume and buy.
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Wine markets in the UAE and Qatar

Overall, the supply of alcoholic beverages remains dominated by the major brands, both in wines and spirits and in beers. There are two trends in consumption:

  • The appeal of premium and differentiating products – which can stand out through effective storytelling, the use of high-quality ingredients, or new flavors (Grey Goose La Vanille, Moët Chandon Nectar Impérial, etc.). The targets will be the fast-growing consumer segments of women and young adults. Stores like “Le Clos” offer extremely rare and expensive wines and spirits, for a clientele wishing to own rare and prestigious consumer items.
  • The search for less expensive alternatives – the notion of price is essential for the majority of consumers in the countries studied, whose purchasing power has generally contracted recently and will most likely continue to do so in the short and medium term. Increased taxes (particularly in Qatar and the UAE over the past two years) are also an incentive to consume products with a lower starting price.

France is the leader in wine imports in all Gulf countries. France has a 55% market share in the United Arab Emirates and up to 67% in Qatar in 2019.
France’s main competitors are:
– Australia, which accounts for 12% of imports to the UAE;
– South Africa, with 7% in the United Arab Emirates;
– Italy, with 7% of imports to the UAE;
– The United States, which accounts for 5% of imports to Qatar.

The structural characteristics of the markets encourage the proposal and consumption of known appellations or grape varieties considered common in the new world (Malbec, Chardonnay, etc.). At the same time, there is a consumption of wines at very moderate prices.

Festive consumption habits are observed in Bahrain, Qatar and the UAE. Over the last few years, the demand for sparkling wines has been growing steadily, and France is far ahead in the rankings, primarily with its Champagne offer. Prosecco and other less expensive sparkling wines are becoming more and more popular, especially in the Emirates.

French rosé wine exports (by volume) are growing significantly between 2018 and 2019 except in Qatar. Specifically, the rosé category is the only one on the rise in the UAE.

UAE: the second largest economy in the Arab world

The Trucial States of the Persian Gulf coast granted the UK control of their defense and foreign affairs in 19th century treaties. In 1971, six of these states – Abu Dhabi, ‘Ajman, Al Fujayrah, Ash Shariqah, Dubayy, and Umm al Qaywayn – merged to form the United Arab Emirates (UAE). They were joined in 1972 by Ra’s al Khaymah. The UAE’s per capita GDP is on par with those of leading West European nations. For more than three decades, oil and global finance drove the UAE’s economy.

The UAE is a developed nation with a federalist monarchy form of government. It is the second largest economy in the Arab world after Saudi Arabia, with a gross domestic product (GDP) of $396 billion in 2020. The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP from the oil and gas sector to 30%. Foreign nationals account for 88% of the UAE’s population. 90% of food consumed in the UAE is imported.

Retail in the UAE

The UAE has always been at the center of global trade because of its geographic position as a nexus between East and West, the Middle East and North Africa.
The general retail landscape is well established in urban areas with extensive malls and world-leading shopping centers. UAE residents frequent hypermarkets and supermarkets in malls due to easy access, car parking availability, the variety of products, and of course attractive in-store promotions.
The food retail market is dominated by several retailers with majority market share

Major Hypermarkets in 2020# of StoresMarket share
Carrefour (Majid Al Futtaim Hypermarkets)2840.7%
Lulu Hypermarket (Lulu Group International)7622.3%
Union Co-operative Society2018.5%
Abu Dhabi Cooperative5.3%
Sharjah Cooperative Society3.6%

The UAE retail industry targets customers from four major groups: the local Emirati population, Arab expats, Westerners, and Asians: 11% Emiratis, 50% from the Indian subcontinent, nearly 10% Westerners. Retailers must meet the needs of a diverse population with varying income levels by closely monitoring consumer attitudes and trends.

Major Supermarkets in 2020# of StoresMarket share
West Zone128+17.1%
Carrefour Market4313.2%
Spinneys7011.2%
Al Maya Supermarket11.1%
Buy ‘N’ Save8.9%
Al Madina Supermarket7.5%
Choithrams5.5%
Waitrose5.1%
LuLu Supermarket2.1%

Restaurants in the UAE

According to the World Economic Forum, in 2019 travel and tourism accounted for 11.9% of the UAE’s gross domestic product (GDP) and employed roughly 10% of the UAE labor force or 745,000 workers. There are 1,136 registered hotel establishments operating in the UAE, welcoming 27 million guests annually.

According to industry contacts, the UAE was already suffering from a moderate oversupply of hotels and restaurants and revenue had started to decline for most venues around two years ago in 2018. This downturn was partially caused by VAT implementation, which increased operational costs and had an impact on consumer prices.

Foodservice in 2019# of outlets
Cafés/Bars3.374
Full-Service Restaurants10.321
Limited-Service Restaurants3.229
Self-Service Cafeterias22
Street Stalls/Kiosks436
Total17.382

There is a wide range of needs for varied international ingredients due to significant differences in income between the lowest and highest earners in the UAE, as well as the large diversity of ethnic groups that call the UAE home. The Gulf region has a significant preference for Western foods, especially when dining-out or snacking-in. U.S. snack food exports to the UAE grew by 2.4% in 2019 as demand increased across convenience stores, entertainment centers, cinemas, hotels, restaurants, parks, and resorts.
The growing millennial population is a key factor driving food trends and services in the UAE. Not only do millennials want healthy ingredients but they also favor convenience. This younger generation is more open to trying new cuisines and prefers the convenience of online platforms for grocery shopping and ordering food. The rise in the number of working women and singles living in the UAE is another factor driving expansions of the dining-out, food delivery, and demand for prepared or semi-prepared meals.

Tied to wellness initiatives has been rising consumer health-consciousness and increased demand for healthier food options, natural and organic food products, and free-from packaged food.

Wine market in the UAE

A license is required only in the Emirate of Dubai to buy alcohol in dedicated stores. It is not required in other emirates. Recently, the sale of alcohol has been opened to tourists by simply presenting a passport. The emergence of an online offer with home delivery, which represents an interesting showroom showroom for suppliers.

For the first time in a decade, alcohol sales volumes saw a decline in 2018. This was due to the introduction of several taxes in 2018 (including VAT), changes in consumer habits, and demographic shifts (slowing growth of mostly expatriate and non-Muslim alcohol consumers). The market has held up thanks to the influx of tourists and high alcohol consumption in restaurants and nightclubs. The vast majority of hotels and tourist attractions have a liquor license.

The rules, previously very strict for the consumption of alcohol, are becoming more flexible year after year.

Qatar’s Economy

Ruled by the Al Thani family since the mid-1800s, Qatar within the last 60 years transformed itself from a poor British protectorate noted mainly for pearling into an independent state with significant oil and natural gas revenues.
Former Amir HAMAD bin Khalifa Al Thani ushered in wide-sweeping political and media reforms, unprecedented economic investment, and a growing Qatari regional leadership role, in part through the creation of the pan-Arab satellite news network Al-Jazeera and Qatar’s mediation of some regional conflicts.
In mid-2013, HAMAD peacefully abdicated, transferring power to his son, the current Amir TAMIM bin Hamad. TAMIM is popular with the Qatari public, for his role in shepherding the country through an economic embargo by some other regional countries, for his efforts to improve the country’s healthcare and education systems, and for his expansion of the country’s infrastructure in anticipation of Doha’s hosting of the 2022 World Cup.

Qatar’s oil and natural gas resources are the country’s main economic engine and government revenue source. Following trade restriction imposed by Saudi Arabia, the UAE, Bahrain, and Egypt in 2017, Qatar established new trade routes with other countries to maintain access to imports.

Wine market in Qatar

Qatar is a slightly more conservative country than the UAE. Non-Muslim consumers (residents and tourists) may have restricted access to alcoholic beverages. Dependent largely on tourism, the country has been heavily impacted, since June 2017 by the diplomatic crisis with the UAE, Saudi Arabia, Bahrain and Egypt.

As a result, the entry visa requirement was removed in 2017 for nationals of 80 countries and the possibility was given to hotels to continue serving alcoholic beverages during Muslim holidays in order to support their revenues.

About 20 bars, restaurants in 4 or 5 star hotels have a license to distribute alcohol. There is a single legal outlet: the Qatar Distribution Company warehouse.

The hosting of the World Cup in 2022 will have an undeniable impact on the sale of alcoholic beverages as well as on the position of the public authorities with regard to the market and the accessibility of alcoholic beverages. The government has announced the creation of areas reserved for non-Muslim visitors to meet the demand for alcohol from soccer fans.

15 licensed operators

In the Arabian Peninsula, the import and distribution of alcoholic beverages is in the hands of a handful of licensed operators. More precisely, there are about fifteen operators in the UAE, but the market in the Emirate of Dubai is only open to two of them (MMI and African Eastern, which also have subsidiaries in Oman and Bahrain). in Oman and Bahrain.
If this characteristic seems to be comfortable for the comprehension of the market, it is on the other hand an important difficulty : the very low number of import operators is to be put in parallel with the unlimited number of world suppliers. Obtaining the interest of an operator is, therefore, a very uncertain thing (portfolio of about 4 000 references in the UAE as in the whole of the Gulf countries).

The best way to enter the UAE market is to identify a reliable business partner with a strong understanding of consumer demand, import regulations, and local business practices. This partner could be an importer, distributor, wholesaler, retailer, or a combination thereof. UAE retailers rely heavily on independent importers or distributors for food products. Grocery retailers are classified into two major groups in the UAE:

  • Modern and traditional trade. Modern trade includes hypermarkets, regional grocery chains, express markets, specialty grocers, convenience stores and online grocers. Modern trade dominates the market especially in the emirates of Dubai and Abu Dhabi.
  • Traditional trade includes direct trading services and standalone small grocers (baqala in Arabic) focusing on immediate household needs and high turnover grocery products; they accept phone-in orders and offer free and immediate delivery with no minimum order. Traditional trade is more popular in the older part of Dubai and the Northern Emirates.
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Although the UAE has a rich Arabic culture and Islamic values, it is a cosmopolitan country and follows international business practices. Importers come from different nationalities and established family trading businesses that have grown over many years. It is imperative to visit the market to build connections with the industry, evaluate partnerships, and identify new opportunities. The effort to make personal contact demonstrates commitment to the market.

Because the UAE is dependent on agricultural imports it has an advanced supply chain that involves multiple layers. U.S. suppliers and manufacturers export products directly or through consolidators, products are then received by UAE importers, agents, or distributors for sale to retailers, food processor, hotels, or restaurants where they finally reach end-consumers.

The UAE represents the regional platform that re-exports to its neighboring countries and beyond In 2018 the country thus exported USD 4.9M worth of wine (mainly to Oman and Kenya). To be pointed out a growing import in Bahrain and Oman from the UAE, respectively 14% and 62% of imports in 2018 which thus play a role of transit platform.

arabian
UAE and Qatar: Leading Wine Markets in the Arabian Peninsula
Our evaluation method
The data shows key metrics, and these are combined to show a ranking calculated using a composite weighted attractiveness combining overall economic factors and wine market factors.
WINE CONSUMPTION IN VOLUME
24
WINE CONSUMPTION IN VALUE
49
IMPORTED WINE IN VOLUME
33
IMPORTED WINE IN VALUE
52
POPULATION
41
GDP PER CAPITA
74
Reader Rating0 Votes
0
48
Wine Market Attractiveness