Alcoholic drinks recorded robust growth in 2022 as sales continued to recover from the impact of COVID-19. Expanding local production, especially in wine and beer, has supported growth by offering consumers affordable options at a time when currency devaluation is making imported products much less affordable.
Ethiopia has a large domestic market with a total population of 123 million people as of 2022, making it the second most populous country in Africa after Nigeria. The country continued to suffer an intense period in 2022 during which the country was impacted by the COVID-19 pandemic and the prolonged and devastating civil war.
Ethiopians generally enjoy socialising over alcoholic drinks and there is a strong preference for lower-strength drinks. While attitudes towards women consuming alcoholic drinks are changing in Ethiopia due to the influence of globalisation and female empowerment, women are rarely seen drinking alcoholic drinks in public, unless they are part of a group.
Packaged and traditional alcoholic drinks such as Tej and Tella are widely consumed in Ethiopia and they remain popular among consumers of all income levels. High-income consumers account for a low proportion of Ethiopia’s total population and they live mainly in urban areas of the country.
In Ethiopia companies often face long lead-times importing goods and dispatching exports due to logistical bottlenecks, corruption, high land-transportation costs, and bureaucratic delays. An acute foreign exchange shortage (the Ethiopian birr is not a freely convertible currency) also impedes the ability of companies to repatriate profits and obtain investment inputs.
In February of 2019, the Ethiopian government banned the sale of alcohol to people under 21 years of age, as well as banning smoking in close proximity to government institutions, medical facilities and entertainment spots. Despite the regulation, in 2022 the enforcement remains weak as increasing numbers of youths under the age of 21 years of age consume traditional as well as packaged alcoholic drinks across the country.
The Ethiopian Government amended the excise laws in 2023, Proclamation No 1287/2023, resulting in a shift in the excise tax for alcoholic beverages, with this repealing the previous excise tax proclamation and its amendments. The excise tax on beer ranges from 30-40% under the new proclamation, with the same applying to wine.
Beer is expected to continue driving the growth of alcoholic drinks in Ethiopia in 2023 and beyond. However, with Diageo’s exit this will mean that the competitive landscape within beer will become increasingly consolidated.
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Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.See All of Our Definitions
This report originates from Passport, our Alcoholic Drinks research and analysis database.
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