Demand for alcoholic drinks increased in Oman in 2023 as the presence of affluent expatriates in the country supported demand. Positive growth in beer, wine and spirits is also being supported by buoyant inbound tourism flows and the rebound being seen in the numbers of expatriates living in Oman, trends which are underpinning an expansion off the consumer base for alcoholic drinks, especially beer and wine, keeping in mind the preference for avoiding alcohol among the local Muslim population.
2023 saw further positive growth in demand for beer, wine and spirits among the population of Oman after positive volume growth returned to the industry in 2022, following two years of sales declines in the wake of the COVID-19 pandemic during 2020 and 2021. Sales of alcoholic drinks were already under pressure prior to the onset of the pandemic due to the imposition of a 100% excise tax on alcoholic drinks by the Omani government in 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 period, inflationary pressures combined with the introduction of a 100% excise tax in 2020 (also referred to as a “sin tax”) led to alcoholic drinks becoming far less affordable for many people living in Oman. Nonetheless, despite this, 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 to make the most of its 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 rise. Nonetheless, growth rates are only expected to be moderate, with on-trade volume sales unlikely to recover to pre-COVID-19 levels before the end of the forecast period.
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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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