Australia’s eleventh largest wine export market – United Arab Emirates

Australia’s wine exports have grown significantly to the United Arab Emirates (UAE) in the past 5 years, from $13.6 million in 2013 to $31.1 million in 2018 (see Figure 1). This represents a compound annual growth rate of 18 per cent annum over the period. The UAE is now the eleventh biggest destination for Australian wine exports by value and if exports continue to grow at current rates, it will likely jump into the top 10 in the next 12 months.

Figure 1: Value of Australian wine exports to the UAE (A$ million FOB)

^{Source: Wine Australia}

Australia is the second biggest wine exporter to the UAE by value behind France. According to the Global Trade Atlas, France holds a 57 per cent value share of wine imports compared to Australia’s 12 per cent. Around half of the French exports to the UAE are sparkling wine (including Champagne).

Just over half of the Australian wine exported to the UAE in 2018 was priced at $10 or more per litre. It is also the fastest growing price point, with the value up 57 per cent compared to 2017. Red is the most popular wine style, with more than a three-quarter share of Australian exports.

A federation of seven emirates

The UAE is situated in the southeast of the Arabian Peninsula, bordering Oman and Saudi Arabia. In December 1971, the UAE became a federation of six emirates – Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, and Fujairah – while the seventh emirate, Ras Al Khaimah, joined the federation in 1972. The capital city is Abu Dhabi, located in the largest and wealthiest of the seven emirates.

Since its federation in 1971, the UAE has developed rapidly and is now noted for its modern infrastructure, international events and status as a trade and transport hub. It possesses among the highest per capita incomes in the world.

In recent years, the rate of transformation has sped up. There has been an even greater emphasis on technology, global trade and tourism in the country’s administrative policies and international relationships. Bilateral relations between the UAE and Australia are friendly and growing.

Alcohol restrictions

Although a strict adherent to Islam, the UAE is aware of and takes into account the differences between the UAE and the West and tries to balance the western and eastern lifestyles in order to minimise any cultural clashes.

Within the emirates, alcohol controls vary. In Sharjah, alcohol is banned altogether. Where allowed, alcohol is usually consumed by expatriates and tourists but is strictly controlled. Due to the restrictions on alcohol consumption, advertising material is not allowed except at point of sale. Magazine advertising is permitted, however, the content must be in English and aimed only at tourists^[1].

Vibrant expatriate community

The UAE has a vibrant expatriate community (which makes up nearly 90 per cent of the population) and their consumption has contributed to the growth in wine sales in the UAE. The UAE population in 2019 is 9.68 million according to the World Bank. The expatriate mix is illustrated in Figure 2 below.

Figure 2: Expatriate population in the UAE

^{Source: globalmediainsight.com}

Tourism’s impact on wine sales

Tourism is also having a profound impact on wine sales. Dubai has become a popular luxury holiday destination for international tourists. With 15.8 million international visitors in 2018, Dubai is the sixth most visited city in the world. Hong Kong (27.9 million visitors), is at the top of the list, followed by Bangkok (21.2 million) and London (19.8 million). Paris and Singapore complete the list of the top five.

The number of international tourists to Dubai has grown by 5 per cent per annum over the past five years. Dubai aims to attract nearly 20 million visitors by 2020. To this end, a series of promotions and campaigns have showcased Dubai as a leading global tourist destination. A wide range of initiatives like visa-on-arrival facilities for more countries and no charge transits for up to 48 hours have been launched to attract more tourists. As the number of international tourists continues grow, one could expect further growth in Australian wine exports.