Alcoholic drinks in Iraq faced huge challenges in 2023 after the Iraqi Government announced stricter enforcement of the 2017 ban on the sale of alcohol. In the KRG meanwhile, strong sales growth is being seen as the alcohol ban is not enforced there.
During March 2023, the government of Iraq finally began taking concrete steps towards enforcing the alcohol ban that passed into national legislation in 2016. While the reasons for the 7-year lag in enforcing the legislation from 2016 to remain unclear, it is likely that the increasing influence of political parties aligned with radical Islamic movements in Iraq’s parliament is the main reason for the enforcement of the ban taking effect during 2023.
In October 2016, the Iraqi Parliament passed a law banning the consumption, production and sale of alcoholic drinks, an unexpected move at the time. The ban was swiftly condemned by Christian and liberal groups and subsequently ruled unconstitutional by the President, due to its erosion of personal freedom.
The profile of the typical Iraqi alcoholic drinks consumer is slowly changing. While alcohol consumption is still far more common in urban areas than in rural regions of the country, there is currently a pronounced shift away from older middle-class men towards younger generations of men as the country’s most enthusiastic drinkers, a trend that has been evolving since around 2005.
Despite the more stringent enforcement of the legal regime pertaining to alcoholic drinks in Iraq, there is currently a growing trend towards local alcohol production, especially in the KRG region. On the one hand, farmers in the KRG often produce wine in small quantities, with nine factories in the region manufacturing low-quality brands of wine.
In 2016, Iraq passed a controversial law that in effect banned the import, trade, sale and consumption of alcohol. This law remained unenforced until February 2023, when more conservative elements that had gained influence in the country’s parliament began to make use of illicit mechanisms to begin enforcing the law stringently.
There are rumours that the Kurdistan Regional Government (KRG) has plans to raise the import tax on alcohol by 100%, although there are no published sources corroborating or confirming this information. Nevertheless, it is widely known that import taxes are not formally formulated or enforced in the KRG region of Iraq, providing the government with leeway to increase taxes without also taking the presumably necessary step of passing new laws to enforce these new taxes.
Iraq’s alcohol drinks market is still in the process of adjusting to the stricter enforcement of the official ban on the importation, distribution, sale and consumption of alcohol and the forecast period is likely to see the market struggle to adapt to an adverse and uncertain legislative and regulatory scenario. Crucial to survival and success in an industry influx will be gaining a solid understanding of how the market works in reality and how consumers will react to the stricter enforcement of the official alcohol ban over the long term.
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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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