Demand for alcoholic drinks came under severe pressure in 2020 and 2021 as the economic crisis undermined the ability of all but the most affluent consumers to afford to drink on a regular basis. In particular, major price hikes for imported brands pushed demand towards local products in beer, wine, gin and arak.
Volume sales of alcohol drinks dropped sharply during 2020 and 2021 as demand plummeted due to the impact of the COVID-19 pandemic and Lebanon’s deep and protracted economic crisis. The economic crisis has led to consumers facing a combination of falling disposable incomes and rapidly rising inflation, with the country teetering on the brink of economic collapse towards the end of the review period.
Lebanon is one of the few countries in the region where the consumption of alcohol is very much socially accepted, even among many Muslims. Beirut has historically been a touristic city with a very developed nightlife which attracted hundreds of thousands of visitors.
Lebanon’s economic collapse continues, with a deteriorating situation leading to more unrest, product and medication shortages, and many other issues. The collapsing local currency is a major source of concern.
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 2021. At the time of writing, the government of Lebanon and its various public institutions were 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.
After sales of alcoholic drinks fell significantly in 2020 and 2021 due to the impact of the COVID-19 pandemic and the economic crisis, further sales declines are not expected during the forecast period. Instead, 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
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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