Alcoholic drinks recorded robust growth in 2021 after volume sales fell in 2020 due to the impact of the COVID-19 pandemic and excise tax increases. Expanding local production, especially in wine and beer, has supported sales growth by offering consumers affordable options at a time when currency devaluation is making imported products much less affordable.
In recent years, Ethiopia has faced major setbacks because of the impact of the COVID-19 pandemic and widespread political unrest, which in November 2020 evolved into a full-blown civil war in the northern Tigray region of the country. This civil war has continued to have a negative impact on the entire economy and society of Ethiopia.
Ethiopia is one of the most populated country in Africa, with a population of 118 million people in 2021. The population growth rate stands at 2.
In Ethiopia, the COVID 19 pandemic ruthlessly exposed various unfavourable socioeconomic factors, including high levels of income inequality and the vulnerability of much of the country’s population to financial distress during times of economic pressure. This unfavourable socioeconomic situation is the direct result of weak international trade, low productivity, high unemployment and a lack of economic diversification.
Maintaining trade flows was a major priority for the Ethiopian government during the COVID-19 pandemic. At the peak of the pandemic during 2020 and 2021, it was considered crucial to ensure consistent access to essential food and medical items and the government focused heavily on limiting the negative impact of the pandemic on economic activity, with the aims of avoiding a spike in unemployment and preventing huge numbers of households sliding into poverty.
In February of 2019, the Ethiopian government banned the sale of alcohol to people under 21 years of age, as well as banning smoking in close proximity to government institutions, medical facilities and entertainment spots. Despite the regulation, in 2022 the enforcement remains weak as increasing number of youth under the age of 21 years of age consume traditional as well as packaged alcohol across the country.
In 2020, Ethiopian’s Federal Parliament approved a new excise tax proclamation (No1186/2020), repealing the previous excise tax proclamation (No307/2002) and its amendments. The new proclamation proposes to impose the tax on goods that are believed to be luxurious and hazardous to health.
Numerous factors can be expected to influence the strong volume growth that is anticipated in alcoholic drinks over the forecast period. These include rapid urbanisation, increasing numbers of women joining the workforce, improving economic conditions, the expanding mid-income group and rising digital penetration.
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Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.See All of Our Definitions
This report originates from Passport, our Alcoholic Drinks research and analysis database.
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