Beer in Morocco

2021 DEVELOPMENTS

Imported lager becoming fragmented with increasing entry of new brands

Following free trade agreements signed by Morocco with its economic partners such as the EU, the US and other countries, customs authorities have been applying a reduction of 10% on customs duties on beer and wine. Thus, customs duties for beer were further reduced in 2021 to 4.

Shrinking market prompts producers to marginally increase prices

Despite the reduction in import tax, alcoholic drinks players were confronted by a new decision by the government to increase consumption tax on beer, which increased by 20% in 2021 to MAD1,200 per hectolitre (up from MAD1,000 per hectolitre in 2020). Players were also confronted by rising global prices and the tough economic conditions which impacted consumers’ purchasing power.

Tough economic conditions favour demand for mid-priced and economy lager

Mid-priced and economy lager, which combined account for the bulk of beer sales in Morocco, were the stronger performers in 2021, while demand for premium lager remained weak with total volume sales declining by another 5%. The pandemic led to higher unemployment and also resulted in lower disposable incomes.

On-trade sales largely impacted by closure of bars/clubs and by drop in tourist arrivals

Following the emergence of the pandemic, Moroccan authorities made several decisions to limit the spread of the virus, including the closure of borders, a ban of international flights and the closure of bars, clubs and restaurants. Although clubs and bars partially reopened in June 2021, on-trade sales struggled to pick up largely due to declining disposable incomes of consumers who preferred to purchase beer through the off-trade channel, which is almost three times cheaper than through on-trade establishments.

Local player Groupe des Brasseries du Maroc SA retains dominance

Local player Groupe de Brasseries du Maroc retained its dominance of beer in total volume terms in 2021, due to its strong presence across the category. The company’s strategy consists of expanding its product line in each area to target different consumer groups, such as Stork and Kania brands in the economy segment, La Speciale Flag and 33 Export in the mid-priced segment, and Heineken and Casablanca in the premium segment.

La Speciale Flag remains mainstream

The mid-priced segment totalled 49 million litres in 2021, which represents more than 60% of overall lager sales in Morocco. La Speciale Flag is considered the mainstream brand, enjoying the largest customer base for years due to its heritage.

Non-alcoholic beer registers further impressive growth through off-trade

Non-alcoholic beer registered further impressive volume growth in 2021, driven by off-trade sales. Morocco is a Muslim country where according to Islam law, drinking alcohol is forbidden.

PROSPECTS AND OPPORTUNITIES

Dismantling of customs duties will lead to further fragmentation

Customs duties levied on imported lager are expected to be completely dismantled by 2022. As already witnessed at the end of the review period, the number of imported products and new entrants is expected to continue increasing over the forecast period, which will lead to further market fragmentation.

Economy lager will remain popular amid persisting pandemic and economic difficulties

Economy lager will remain popular in Morocco as the persisting pandemic and economic difficulties due to COVID-19 along with high unemployment levels and decreasing disposable incomes will likely lead to further economising over the early part of the forecast period. Moreover, off-trade sales are expected to remain dominant due to the ongoing economic recession and due to the fact that this channel targets a mass consumer base mostly comprised of mid- and lower-income consumers who are extremely price conscious.

Non-alcoholic beer to register fastest growth over forecast period

Non-alcoholic beer is expected to register the fastest growth over the forecast period, with a 16% total volume CAGR, albeit from a low sales base. Non-alcoholic beer is relatively undeveloped in Morocco, with a basic range of products on offer.

Dark beer and stout to remain negligible in Morocco

The presence of dark beer and stout remained negligible in Morocco over the review period, with these beer types unlikely to achieve any significant sales during the forecast period. Although there were several attempts by players to introduce dark beer brands towards the end of the review period including the domestic Flag Spéciale Black or imported dark beer such as Hoegaarden and stout brand Guinness, such products have failed to attract significant consumer interest due to lack of product visibility or marketing.

Local players will continue to maintain competitive prices

Beer players will face several challenges over the forecast period, related mainly to the global spike in prices of raw materials, mainly for malt and sugar, in addition to packaging materials and the rising consumption tax. On the other hand, declining disposable incomes have not only had a severe impact on demand, but also prompted the mass base of price-sensitive consumers to switch to economy lager.