Alcoholic drinks in Iraq faces major challenges, not least the presence of a huge and largely unchecked black market in counterfeit brands. Rampant corruption and lack of political will continue to support this trade in illicit products, with the appeal of legitimate products limited to educated, sophisticated and affluent urban consumers.
During 2020 and 2021, Iraq’s alcoholic drinks market remained in a grey area due to heavy corruption, which has affected all imports, resulting in instability and vulnerability to shocks in the supply chain. The source of the corruption is a group with close links to the Kurdistan Democratic Party which controls all of the border points between the KRG and Turkey.
The acquisition, possession and consumption of alcoholic drinks remains in a legal and social grey area for most Iraqis. However, this adverse situation is slowly changing as more people become accustomed to the idea of liberated alcohol consumption.
The taboos have traditionally surrounded alcohol consumption in Iraq are slowly disappearing and it is becoming less socially unacceptable to drink and, more importantly, to be seen drinking. This more liberal approach forms part of the changes social attitudes that have been seen in many Iraqi communities are and which have led to a more open attitude towards alcoholic drinks generally.
The alcohol distribution and import in Iraq remains very challenging and all of the major players in the market continue to face numerous formal and informal bottlenecks. However, market conditions remain relatively favourable for a handful of well-connected organisations, which are able to take advantage of various factors that ensure that access to a stable and functioning market is on the table for the lucky few.
Although there were no new legislative instruments relating to alcoholic drinks in Iraq during 2020 or 2021, discussions in parliament points towards greater formalization of the entire industry. This is likely to lead to tax increases as well as providing consumers and industry players with greater clarity, making it easier and more cost-effective to operate industry, while benefiting consumers by reducing the impact of smuggling and counterfeiting.
No new taxes were introduced for alcoholic drinks during 2020 or 2021. One point not here is that are groups operating within the government of Iraq who have a particular interest in maintaining the status quo as they stand to make considerable sums of money via extortion and informal taxation on the alcoholic drinks market.
The consumption of alcoholic drinks is expected to expand in Iraq during the forecast period. The most important factor to consider here is that industry remains underdeveloped and it has never been allowed to reach its full potential.
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Alcoholic Drinks
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
See All of Our DefinitionsThis report originates from Passport, our Alcoholic Drinks research and analysis database.
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