Total volume sales of alcoholic drinks declined again in 2021 as the COVID-19 pandemic accelerated the narrowing of the core consumer base for the category. With local people officially banned from buying and consuming alcohol, industry players rely on demand among expatriates for sales, while the ban on the marketing of alcoholic drinks makes it challenging for brand owners to influence consumer choices.
Alcoholic drinks registered negative volume growth during both 2020 and 2021 as sales come under pressure as a result of the COVID-19 pandemic and the official response to it. In particular, on-trade sales plummeted during 2020 before recovering somewhat during 2021, although this was nowhere near enough to compensate for the substantial falling demand seen during 2020.
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, inflationary pressures led to alcoholic drinks becoming far less affordable for the majority of people living in Oman. Nonetheless, Despite 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 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 expected to be nearly moderate, with non-trade volume sales unlikely to recover to pre-COVID-19 levels before the end of the forecast period.
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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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