Alcoholic drinks is facing significant challenges amidst Ethiopia's economic turmoil in 2023, with inflation soaring at 30% driven by the global economic aftershocks of the COVID-19 pandemic. As a result, local breweries have hiked wholesale beer prices by three times as much as seen in previous years.
In 2023, Ethiopia has witnessed a staggering 30% year-on-year inflation, driven by political unrest, forex shortages, and the global economic aftershocks of the COVID-19 pandemic. This economic turmoil has forced local breweries to triple the wholesale of beer, meaning most beers are increasingly unaffordable for many Ethiopians.
Alcohol consumption in Ethiopia is predominantly led by beer, commanding 50-70% of the formal market share. Following closely behind is spirits, where both local and imported brands are consumed, often dictated by consumers' income levels.
Packaged and traditional alcoholic drinks such as Tej and Tella are widely consumed in Ethiopia and they remain popular among consumers of all income levels. High-income consumers account for a low proportion of Ethiopia’s total population and they live mainly in urban areas of the country.
The logistics sector in Ethiopia is severely underdeveloped, marked by inadequate road infrastructure, especially in rural areas, inefficiencies in goods clearance at borders, a shortage of freight vehicles, and a significant mismatch between the demand for and supply of cross-country transport.
In February of 2019, the Ethiopian government banned the sale of alcohol to people under 21 years of age, as well as banning smoking in close proximity to government institutions, medical facilities and entertainment spots. Despite the regulation, in 2022 the enforcement remains weak as increasing numbers of youths under the age of 21 years of age consume traditional as well as packaged alcoholic drinks across the country.
The Ethiopian Government implemented Excise Tax No.1186/2020 to levy taxes on goods and services deemed luxury items, hazardous to health, socially problematic, or inelastic demand.
Over the forecast period, alcoholic drinks in Ethiopia will face significant challenges and opportunities driven by the country's excise tax regime and high inflation affecting alcohol prices. These factors have notably impacted beer consumption, with manufacturers operating below capacity as consumers turn to cheaper alternatives like home-brewed traditional drinks and local spirits.
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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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