Locals are officially banned from buying and consuming alcohol, with players relying on expatriates for sales, while the ban on marketing alcoholic drinks makes it challenging for brand owners to influence consumer choices. Nonetheless, the lifting of COVID-19 restrictions provided a boost to sales in 2022 as consumers returned to socialising.
Sales of alcoholic drinks declined in 2020 and 2021 as the pandemic made it harder for consumers to socialise at home and in on-trade establishments. However, sales of alcoholic drinks recorded a partial sales recovery in total volume terms in 2022 following the resumption of socioeconomic activities that had been curtailed by COVID-19.
The drinking of alcohol is against the cultural and religious beliefs of many Omani nationals and this means that many refrain from alcohol consumption altogether. Thus, expatriates are the main consumers of alcoholic drinks in the country.
Towards the end of the review period, inflationary pressures combined with the introduction of a 100% excise tax in 2020 (also referred to as a “sin tax”) led to alcoholic drinks becoming far less affordable for many people living in Oman. Nonetheless, despite this, many affluent Western expatriates can still afford to consume alcohol in the on-trade due to their high incomes and relatively low outgoings, which has made it possible for them to continue justifying spending money on alcoholic drinks.
Oman’s annual spending on infrastructure is high. With investment focused on the main ports of Sohar, Duqm and Salalah, the aim of the ongoing development of Oman’s infrastructure is to enable the country to position itself as a global shipping and logistics hub and to make the most of its superb strategic location at the opening of the Straits of Hormuz.
Consumers can obtain a licence to drink alcohol at home from the police. However, it is an offence to drink or be drunk in public.
VAT was introduced into Oman on 16 April 2021, when Royal Decree No121/2020 brought the country into compliance with the 2016 GCC-Wide VAT Agreement. This agreement serves as a guide for GCC states to implement almost identical, domestic value added tax (VAT) laws on the supply chains in their respective countries.
Over the forecast period, sales of alcoholic drinks are expected to continue rising in line with population growth, with the numbers of expatriate workers living in Oman expected to recover after falling significantly towards the end of the review period due to narrowing job opportunities as a result of the government’s pursuit of the Omanisation policy and the impact of the COVID-19 pandemic. Nonetheless, growth rates are only expected to be moderate, with on-trade volume sales unlikely to recover to pre-COVID-19 levels before the end of the forecast period.
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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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