February 7, 2023

Alcohol tax removal triples licence applications, but Dubai Duty Free sales drop

categories : finance & economy

MMI plans to hire new staff and looking at part-time worker solutions

The number of alcohol licences handled by Maritime Mercantile International (MMI), one of two major purveyors of alcohol in Dubai, tripled during January as consumers rushed to take advantage of cheaper prices following the removal of the emirate’s municipality alcohol sales tax.

Group CEO Tyrone Reid said the company, which handles licence applications along with the emirate’s other alcohol supplier, African and Eastern, said it had also seen a “positive, double-digit increase” in sales during the month, but declined to give further details.

Reid told Zawya in emailed responses to questions that the company would be taking on a blend of new staff and looking at part-time worker solutions to cope with increased demand.

He also said the firm would be “continuing its convenience store strategy” in response to questions about whether there would be more new stores in Dubai following the removal of the tax, which has been instituted on a trial basis by the government for the year 2023.

While sales may be booming for Emirates Group subsidiary MMI, Dubai Duty Free (DDF) saw alcohol sales in Arrivals drop 5.2% for the month of January, as the abolition of the tax does not apply within the airport, according to Ramesh Cidambi, DDF’s chief operating officer. Across the company, however, sales were up 0.35% compared with 2019, he added.

“In general, the sales of liquor in arrivals was lagging the overall sales in Dubai Duty Free,” he said.

Compared with January 2022, when many COVID-19 travel restrictions were still in place, alcohol sales in Arrivals were up 43.3%, while the total company sales were up 65.3% on 2022.

“Liquor remains 80% of our Arrivals business and Dubai Duty Free will continue to focus on this category while continuously reviewing the performance of the other categories in our Arrivals stores.

“Dubai Duty Free will also continue to reinforce its message in relation to the attractiveness of its retail offer in Arrivals in social media in order to encourage both tourists and residents to visit the Arrivals shops before they leave the airport,” he concluded.


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