Why this is important to Wisconsin businesses: Although sharia prohibits Muslims from purchasing and consuming alcohol, 85 percent of UAE residents are expats.
The United Arab Emirates (UAE) is a member of the Gulf Corporation Council (GCC), along with Bahrain, Kuwait, Qatar, Oman and Saudi Arabia. Although sharia prohibits Muslims from purchasing and consuming alcohol, many of the Gulf countries have a high percentage of people from other faiths. According to Euromonitor, 48 percent of GCC region inhabitants are expatriates. UAE has the largest population of expatriates, and is home to over 200 different nationalities, accounting for 85 percent of the country’s population. Consequently, relative to other GCC countries, the laws in the UAE are more liberal, and are constantly being developed and adapted to meet the demand of its population and the pace of developments happening in the country. The UAE population was estimated at 9.2 million in 2016, and is expected to be over 10 million by 2020, with over 80 percent being expats. The population growth will come from an expected influx of expatriates, growth in tourism, and infrastructure development in real estate and the hospitality industry in preparation for Expo 2020.
With an expat population of over 7 million people, demand for alcohol is very high. According to Euromonitor, beer and spirits sold in 2014 were estimated at 17.8 million gallons and 5 million gallons, respectively. Sales are projected to rise to 24 million gallons of beer and 7 million gallons of spirits by 2019. Another factor that has contributed to the demand for alcoholic beverages in the UAE is the influx of tourists to the country. Dubai is a popular tourist attraction and is home to the world's tallest building – the Burj Khalifa – as well as man-made islands, an indoor ski slope and miles of air-conditioned walkways in its high-end malls. According to Wine Trend Inc., hotels and hotel-related hospitality venues accounted for more than 80% of alcohol consumption in the UAE in 2015. The UAE welcomed an estimated 14.2 million tourists in 2015, and the number is set to double by 2020, according to the UAE Department of Tourism and Commerce Marketing.
Several infrastructure projects are also underway to meet the needs of the growing population and in preparation for Expo 2020. Expo 2020 is a world's fair held every five years in a selected country, and is expected to attract over 25 million people from around the world to the UAE. Some of these projects include the Dubai Canal Project, Museum of the Future, Jewel of the Creek, Deira Island, Dubai Creek Tower, etc. The development of these projects will also lead to an increase in development of housing, hotels and restaurants, which will subsequently result in an increase in demand for alcoholic beverages. According to a 2016 report, the UAE has nearly 30,000 rooms under construction across nearly 100 hotels. The number is only expected to increase as Expo 2020 approaches.
Demand for alcoholic beverages in the UAE is set to experience rapid growth due to the growing expat population and development in preparation for Expo 2020. This provides opportunities for alcoholic beverage producers to take advantage of this growth and explore opportunities in the region.