The UAE ramps up its luxury wine offering

Economic growth and rising tourism levels are transforming the Gulf region into a key growth engine for the global wine industry, reports Gabriel Stone.

It's a story as fantastic as any spun by Scheherazade in One Thousand And One Nights. The tale of a desert land transformed within one human lifespan into a cluster of glittering cities endowed with every luxury, where people came to seek their fortune – and to spend it. As Europe experiences economic and population stagnation, the Gulf states are set on rather a different narrative. Abu Dhabi, the largest of the United Arab Emirates, saw its population hit 3.8 million in the latest 2023 census, a leap of 83% or 1.7m on 2011 figures. Meanwhile, latest GDP figures show buoyant growth of 4.5% in the third quarter of 2024. That’s not even all down to oil revenue: a successful diversification push means other parts of the economy are growing even faster. It’s a similar tale in Abu Dhabi’s flashier neighbour Dubai, while Qatar and Saudi Arabia have also embarked on transformational growth plans that eclipse the faltering ambitions of most Western countries. With tourism a major part of these strategies and ex-patriates a significant chunk of the workforce, there is increasing evidence that wine has a chance to be part of the UAE boom in particular. Even here, however, cultural and religious sensitivities create a strange juxtaposition of strict licensing and advertising laws alongside free-flowing rosé during beachside brunches. Amid the respectful acknowledgement of this delicate balance, there’s a definite sense of optimism from every corner of the wine trade. Their duopoly on the Dubai wine scene and dominant presence across the wider region gives rivals African + Eastern and MMI a particularly good view of the trading landscape. Tony Dodds, general manager for wine, Champagne & sake at MMI, reports a bounce-back to “well above pre-pandemic numbers”, with Dubai growth driven by “hundreds of restaurant and hotel openings, increased tourist arrivals and a regular stream of new residents. This has led to us increasing our range, opening new stores and starting a home delivery service.”  

  Over at African + Eastern, Matthew Castle, group category manager for wine & Champagne, confirms “strong growth” since 2021, with 2023 and 2024 particularly strong thanks to Dubai’s suspension of its 30% sales tax. “The tax-free environment allowed our customers, both trade and consumer, to explore regions and upgrade their wine-drinking choices,” he explains, pointing to “dramatic growth” in last year ’s fine wine sales. The reinstatement of the sales tax signals an end to that mini-boom, meaning that 2025 “will be a challenging year in certain areas of the business”, confirms Castle. Both MMI and African + Eastern pledged to absorb much of the price rise, at least initially, in a bid to cushion the impact on customers. The effect of this change will be more obvious in the retail sector than the on-trade, where by all accounts not everyone passed on the tax break in the first place, but overall many observers remain unruffled. Highlighting the Middle East as “increasingly important to Penfolds over the last decade”, Daevid Warren, commercial director for Penfolds EMEA, picks out UAE as a “lighthouse of luxury”. The luxury hotel sector is a particular beacon. Warren flags up close relationships with the Burj Al Arab, The Atlantis and Park Hyatt, as he notes: “For us, the priority is to align with prestigious venues wherein we can showcase Penfolds alongside incredible food, in a luxurious setting.”

Off-trade challenges

That sort of direct consumer engagement becomes more challenging in the off-trade, where the absence of above-the-line alcohol advertising or licensed supermarket channels make brand visibility and data capture difficult. In response, Warren explains: “We’ve made a conscious effort to grow our ‘black book’ of contacts,” which will be deployed for events such as this year ’s 180th anniversary Penfolds Bin 180 release, as well as special bottlings for “the right customers”. Penfolds has also recruited a luxury sales manager who, Warren explains, “will play a key role in engaging the end customers across the Emirates”. Other wine brands have also identified the UAE as a market that will reward investment. “This market is very important to us,” confirms Faouzi Issa, coowner & winemaker at Domaine des Tourelles in Lebanon, a country with geographical and cultural links to the UAE accentuated by the large Lebanese community here. This diaspora may quench its homesickness primarily with Tourelles’ famous Brun arak, but Issa has also found a foothold in the increasingly competitive wine market. “Business has been growing every year for 10 years,” he reports, citing Dubai Duty Free as a particularly successful outlet. The UAE may currently represent “less than 5% of total sales” for Argentina’s Achaval Ferrer, according to the producer ’s EMEA regional sales manager Jevgenijs Suscinskis, but “during the past five years we have experienced high double-digit growth, and we expect to continue with the same trend in the coming years”, he says. In his experience, the challenge of consumer-focused marketing makes direct engagement “essential” for anyone hoping to build a strong wine brand here. “The UAE trade particularly appreciates direct communication from someone who travels from the winery to share firsthand knowledge of the wines,” observes Suscinskis. He identifies sommeliers as a “crucial” focus for these visits, in a market where the on-trade does so much to drive trends and consumer engagement.

“You build your brand through sommeliers,” agrees Nicola Arcedeckne-Butler MW, buying director at Private Cellar. This UK merchant has had a stake in the Middle East for around 20 years now, thanks to its fully-owned sister company, wine importer MBM Resource Trading International. “We arrange when we can for our producers to have tastings for sommeliers, then maybe a dinner with private customers in the evening,” she explains. With sales manager Alasdair Lawson-Dick spending six weeks a year out in the market, Arcedeckne-Butler insists: “Having someone on the ground really makes a huge difference.” That hands-on approach is also key in a region where storage, shipping and grey market imports can all pose problems. “We are the only people who guarantee to ship under reefer all year round,” claims Arcedeckne-Butler, noting: “It’s an absolute minefield storing wine in Dubai.” While most of the company’s fine wine customers will have a Eurocave at home, longer-term or larger-volume purchases such as en primeur tend to have less appeal. “Burgundy is a bit easier because they drink earlier, but for Bordeaux you’re looking at least 10 years,” she remarks. “They’re not really in the business of holding wines.”

Cross-pollination

Despite this difference, the strong European expat and tourist clientele creates undoubted similarities between restaurant wine lists here and in London. That cross-pollination is heightened by the proliferation of international roll-outs, such as Jason Atherton’s City Social and its two Michelin-starred sibling Row on 45, which occupy different floors of the Grosvenor House Hotel, overlooking Dubai Marina. Head sommelier across both venues is Lorenzo Abussi, who has spent the last decade travelling full-circle from Dubai to Mayfair and Yorkshire, before returning via a stint in Cyprus to Dubai two years ago. In the interim, he notes: “Our supplier ’s portfolio has expanded 100 times.” For a sommelier, that means “nowadays you can really make a very interesting list with what’s in Dubai, and there’s the depth of vintages too.”

In a market where a new venue opens every week, no-one can sit on their laurels. “To keep it interesting, we refresh the list every three to four months,” confirms Abussi, who has recently added a grower Champagne as part of this differentiation. There is a limit to how far you can push things, though. Abussi looks back to London where, alongside more staple offerings, “there were also niche products from Georgia or Greece, biodynamic and organic wines. We don’t have wine bars in Dubai with all these wines by the glass”. Even that, he acknowledges, is starting to change, thanks to places such as Boca, a Spanish restaurant with a list notable for its large by-the-glass selection that wouldn’t look out-of-place in a Hackney natural wine bar. These niches aside, there are many countries that remain underrepresented here. “At the moment, the Portuguese category in UAE is very, very tiny,” reports Alice Suisse de Morais, who spent 10 years working for a Dubai wine importer before relocating to Portugal, where she now helps wine businesses with their sales and marketing strategies. All too aware of the common misconception among wineries approaching the UAE, Suisse de Morais warns: “People are not waiting for new brands; there are already a lot of them.” That said, she adds: “I do sense an opportunity.” For example, Suisse de Morais explains: “If you go to a store, then you have Portugal in the ‘Rest of World’ section along with wines from Lebanon and Georgia. It’s so confusing. We need to have more wines and more brands to create a space so that we can start moving.”

Diverse and mature

When it comes to the off-trade, Abu Dhabi is widely acknowledged as having a more diverse, mature and competitive scene than its Dubai neighbour. That brings scope for the sort of disruptive retail model exemplified by The Bottle Store. Founded in 2021, the company was quick to take advantage of a relaxation in licensing rules and began importing directly. In 2023, it launched what managing partner Sam Underwood claims was the first drinks home delivery app in UAE, reaching customers in an average of 35 minutes and today offering roughly 3,000 products. “That’s where I see the future,” he predicts. The app doesn’t just help wine keep pace with the wider UAE home delivery trend. Compared to sales through The Bottle Store’s four physical outlets, “we’ve actually found a bigger basket spend on the app”, reports Underwood. “People have more time to browse when they’re at home.”

  While Abu Dhabi boasts plenty of glamour and high spenders, it’s a step removed from the unabashed glitz of Dubai. “Abu Dhabi is on a calmer scale,” suggests The Bottle Store’s category manager, Mike Bailey. “The population is more nurses, teachers, construction workers.” That demographic is reflected in the retailer ’s best-selling wines. Sweet wine brand 4th Street, sold in bag-in-box, is popular with many from the Asian communities who work here. Then there are the trends that drift over from Europe. “ Provence rosé started to take off in the beach clubs five or six years ago,” remarks Bailey. Currently he sees demand for “Prosecco by the tonne, Malbec, New Zealand Sauvignon Blanc – in fact, Sauvignon Blanc in general.” As for the more premium end, Bailey paints a picture of “Bordeaux reds and Super Tuscans, with some American wine."

Appetite for learning

That predictable line-up shouldn’t blind onlookers to the dynamism also in evidence here. “We’re bringing in a few hundred new SKUs to the market this year,” confirms Bailey. As a WSET teacher, he sees plenty of evidence that “the appetite for learning here is great”. What’s more, The Bottle Store team is keen to tap into that curiosity to stay ahead of the competition. “For 2025, our primary focus is on enhancing our home delivery app and website to better support customers in making confident and informed choices,” outlines Underwood. His ambition ranges from AI-derived recommendations to interactive video content, using reviews to create a sense of community, and deploying virtual sommeliers to help people from the comfort of their sofa. Such a futuristic, energetic approach to wine sales chimes perfectly with the upward, forward-looking attitude that characterises this corner of the world. Of course, every fairy story contains at least one cautionary tale for those who don’t understand or respect the rules of engagement. That caveat aside, this Arabian narrative has all the momentum to stretch enticingly over many more nights to come.