Sales rose across alcoholic drinks in 2022 as demand rebounded during the post-pandemic era. However, the economic crisis continues to suppress demand and local players, especially wineries, are looking to export markets to generate revenues in foreign currency.
The highly adverse socioeconomic situation that has by now plagued Lebanon for more than three years continued to deteriorate during 2022 as the significant devaluation of the Lebanese pound further undermined the purchasing power of the local population. By the start of 2022, the threat of social unrest was ever-present, with July seeing angry account holders storming bank branches, asking for their funds to be returned to them.
Especially above, the uptick in inbound tourism flows that were seen in Lebanon in 2022 was a major positive influence on sales of alcoholic drinks during the year. Lebanon has always been seen as the playground of the Middle East and the country has long had a reputation for nightlife second-to-none across the region.
During 2022, exchange rate anomalies continued to undermine the spending power of the local population, even after the devaluation of the Lebanese pound, with salaries and wages denominated in local currency not having been adjusted to reflect new realities. A decision was taken by the local government in October 2022 which saw the official LBP/USD exchange rate go from LBP1,500 per USD1 to LBP15,000 per USD1 as of February 2023.
Lebanon’s deeply rooted infrastructure issues go back decades. However they have been severely exacerbated by the ongoing economic crisis.
No changes were seen to the legal regime controlling and or regulating the alcoholic drinks industry during 2022. At the time of writing, the government of Lebanon and its various public institutions were still essentially in stasis, having been effectively paralysed by the economic crisis, which has forced him to prioritise dealing with the collapse of the local economy and the impact of widespread financial hardship.
In June 2017, as part of a raft of new tax measures, the Lebanese parliament approved a one percentage point increase in VAT from 10% to 11%. This new tax regime also saw an additional 500% tax levied on alcohol, in addition to the existing excise.
Moderate positive sales growth is expected in Lebanon’s alcoholic drinks industry over the forecast period, with only RTDs expected to register negative volume growth. Sales are expected to climb as the market adjusts to the new reality, with the emergence of lower-priced local products in categories such as arak, gin, wine and whiskies cater to demand for low-cost alcohol among a population facing a severe economic situation and widespread financial hardship.
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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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