Heineken to draft in Gulf’s first large-scale brewery in Dubai

Amsterdam-headquartered Heineken has a glass half full outlook on beer sales in the Gulf, a region that has a history of restricting alcohol sale and consumption.

Heineken and Dubai-based Maritime and Mercantile International, a marketing and distribution firm, announced Thursday that their joint venture was planning to open the Gulf’s first large-scale brewery in Dubai.

The joint venture, called Sirocco, will start building the brewery in late 2025 and has secured all necessary permits, the firm said in a statement. Construction is due to be completed in 2027.

Beer brands including Heineken, Kingfisher, Amstel and Birra Moretti will be made at the Dubai facility. Currently, the project has 60 members of staff, but Heineken said that this would be upsized to 190 people.

Sirocco, which has been supplying alcohol in the United Arab Emirates for nearly two decades, believes local production will boost output to meet growing demand. Of the 17.3 million tourists Dubai welcomed over 2023, more than 20% of them came from Western countries, according to UAE government data.

“For our tourism and hospitality customers, local production will provide greater flexibility to local market demands," Georgios Polymenakos, general manager of Sirocco, was quoted as saying. The project will be funded by Sirocco through local borrowing and cashflow, the statement added. 

Although alcohol was free to buy and consume in the UAE up until the late 1970s, restrictions were imposed in 1979 to preserve religious standards. In 2006, the Federal Criminal Code was amended to remove the requirement for a license to consume alcohol in certain situations, in a bid to transform Dubai into the tourism hub it is today. Since then, restrictions have loosened as more tourists have poured into the UAE. For example, residents of Dubai no longer have to pay a 30% sales tax and an alcohol license fee to buy liquor. However, sales to Muslims remain restricted.

Up until quite recently, all alcohol was imported and local production was prohibited. However, Abu Dhabi published a subtle rule change in 2021 that allows license holders to make their own alcohol on-site. In December 2023, the UAE’s first brewery, Craft by Side Hustle, launched. Earlier this year, Falcon Brews, based in Ras Al Khaimah, announced plans to open a brewery as well as a bottling plant for spirits in the Al Hulaila Industrial Free Zone. The facility is expected to be built by the end of 2026. 

Middle Eastern countries, such as the UAE and Saudi Arabia, are increasingly looking to diversify their economies away from oil and invest in sectors like tourism and hospitality. In doing so, they have loosened their rules on alcohol.

In February, the first alcohol store opened in the Saudi Arabian capital of Riyadh, the latest shift in the kingdom's conservative societal traditions. The store is for non-Muslim diplomats.