Why Are Middle East Booze Sales Booming?

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There's an old adage in the liquor business that when the economy is good, sales go up as people celebrate--and when the economy is bad, sales also go up as people try to take their minds off of things. It's not clear which effect, if it's either, is at play in the Middle East's region-wide surge in alcohol sales. Financial Times' Simeon Karr reports that the alcohol industry is seeing surprising sales increases from Beirut to Dubai.

The United Arab Emirates, which includes "party capital of the Arabian Peninsula" Dubai, is returning to its 2006-2008 trend of 26 percent annual growth in booze sales, which dropped off during the 2009 recession. In Emirate city Abu Dhabi, sales are "growing at 28 per cent a year." Dubai's airport alone registered a record $1.4 billion in 2010 sales. Alcohol industry pros also project increases in Qatar and Lebanon.

Good news for Middle East alcohol is an unusual phenomenon, given that it is explicitly banned in much of the region, and that even the more liberal countries impose harsh restrictions on sale and consumption. Karr credits those nations' rising emphasis on attracting tourism and especially global business travelers. The quickly expanding ranks of luxury Middle East hotels are helping to grow the business.

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Karr also notes that much of the liquor imported to the Middle East ends up moving to black markets in countries where it is banned. "Industry insiders estimate that more than a half of the alcohol sold to traders in these emirates ends up being smuggled into Saudi Arabia and elsewhere." In Saudi Arabia, a "standard bottle of whiskey" can go for $150. Still, that's better than China, where producers ask up to $2,700 for a fancy bottle of Scotch.

This article is from the archive of our partner The Wire.