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Alcohol rules again loosen as Dubai seeks economic recovery

Alcohol rules again loosen as Dubai seeks economic recovery

Dubai again has loosened laws governing alcohol sales because the overall sales of alcohol by volume fell sharply in 2019. Amid coronacrisis, the sheikhdom tries to claw its way out of an economic depression worsened by the recent lockdown.

The United Arab Emirates suffers from the consequences of COVID-19. The virus worsened an already-gathering economic storm engulfing the Dubai emirate, in particular. The mass layoffs thin the ranks of Dubai’s foreign workforce and empty homes across its vast real-estate sector even amid slight signs of recovery.

Even after lockdown ends, experts warn the sheikhdom’s crucial real-estate market is on track to hit record lows seen in the 2009 Great Recession. Alcohol sales have long served as a major barometer of the economy of Dubai, said Mike Glen, managing director for the UAE and Oman for alcohol distributor Maritime and Mercantile International.

The alcohol sales also serve as a major tax revenue source for Dubai’s Al-Maktoum ruling family, indeed. In addition, Dubai has to postpone its Expo 2020, or world’s fair, to next year, another major blow.

Alcohol sales fell substantially in Dubai in second quarter

Overall sales of alcohol by volume fell sharply in 2019 to 128.79 million litres, down some 3.5% from 133.42 million litres sold the year before, according to EuroMonitor data.

Amid the nationwide shutdown, Dubai’s two major alcohol distributors began legal home deliveries of alcohol for the first time in hopes of boosting the sales. Now, the city-state has changed the very system granting permission to residents to legally purchase alcohol.

The Dubai authorities have loosened laws governing alcohol sales, and the new card system comes. Now, Dubai allows tourists and visitors to buy alcohol from distributors simply by using their passports, closing a loophole that made visiting imbibers unable to get a permit subject to arrest for possessing alcohol.

Despite aggressive re-opening it touristic sector, the recovery in activity has not been sufficient to prevent Dubai firms continuing to lay off workers as they seek to reduce costs, said Khatija Haque, the head of research and chief economist at Emirates NBD.

Both sales and rental prices have dropped about a third since a market high in 2014 when Dubai announced it would be hosting the Expo. The pandemic, coupled with oversupply in the market and reduced occupancy levels, caused and increase in the rate of decline of prices for both flat and villas especially in the Q2.