The two major trends in alcoholic drinks in Lebanon in 2023 were falling off-trade volume sales and rising on-trade demand. While the socioeconomic crisis has curbed spending, many local people are socialising in bars and restaurants more often and this, combined with buoyant inbound tourist arrivals, is supporting a shift in consumption from the off-trade to the on-trade.
Despite all of the negative background factors that continue to affect demand for alcoholic drinks in Lebanon, on-trade volume sales continued to increase during 2023, although the substantial declines seen in off-trade volume sales over the course of the year ensured that total volume growth remained in negative territory. The adverse economic situation and the ongoing collapse of Lebanon’s financial system are the main reasons for the negative sales performances recorded across all categories of alcoholic drinks during 2023, with the negative and uncertain economic background and widespread financial distress among the population largely the result of political instability and the leadership vacuum that has flowed from the absence of presidential authority and governance.
The uptick in inbound tourism flows that were first seen in Lebanon in 2022 and which continued throughout 2023 represented a major boost for on-trade sales of alcoholic drinks during the year. Lebanon has always been seen as the playground of the Middle East and the country has long had a reputation for nightlife that is second-to-none across the region.
Throughout 2023, exchange rate anomalies continued to undermine the spending power of the local population, even after the substantial devaluation of the Lebanese pound, with many salaries and wages denominated in local currency still not having been adjusted to reflect new realities. A decision was taken by the local government in February 2023 which saw the official LBP/USD exchange rate go from LBP1,500 per USD1 to LBP15,000 per USD1 as of February 2023.
Lebanon’s deeply rooted infrastructure issues go back decades. However they have been severely exacerbated by the ongoing economic crisis.
No changes were seen to the legal regime controlling and or regulating the alcoholic drinks industry during 2023. At the time of writing, the government of Lebanon and its various public institutions were still essentially in stasis, having been effectively paralysed by the economic crisis, which has forced him to prioritise dealing with the collapse of the local economy and the impact of widespread financial hardship.
In June 2017, as part of a raft of new tax measures, the Lebanese parliament approved a one percentage point increase in VAT from 10% to 11%. This new tax regime also saw an additional 500% tax levied on alcohol, in addition to the existing excise.
2024 is expected to see a continuation of the general trends in alcoholic drinks in Lebanon, with positive on-trade volume growth expected to continue being matched by volume sales declines in the off-trade. Among the main factors influencing demand are the unfavourable political and social economic situation in Lebanon.
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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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