Targeting observant Muslims with non-alcoholic drinks is also a key strategy albeit a tougher sell for companies whose names are synonymous with beer or hard liquor.
Heineken credits its mix of drinks – such as fruit-flavoured malt-based drinks popular among youth as a beer substitute – for its expansion into the Middle East and North Africa market.
It has a 40 percent market share in the United Arab Emirates, 70 percent in Lebanon and 90 percent in Egypt.
For the brewer, the Gulf Arab market is a small but profitable one, with a limited number of competitors amid a growing expatriate population.
As more international sporting and entertainment events take place in the Gulf – the region is already on the global sporting calendar for Formula One, tennis, golf and horse racing – alcoholic drinks makers see more opportunity for market growth.
“The vision of many Gulf states to become increasingly important in the world market through significant events opens business opportunities for us,” said Diageo’s Ewing.
“We have already begun talks with the Qatar duty free and hope to have a good presence in the new airport.”
Qatar, a tiny gas-rich Gulf Arab state last year won the right to host soccer’s World Cup in 2022 and now faces questions on how the Muslim country will cope with the influx of fans, many of whom are used to drinking as part of the experience.
Qatar, in addition to a new airport, hotels and other facilities, has also promised concessions for alcohol consumption, including special fan zones around the stadiums and licenses allowing restaurants to serve alcohol during the games.
“Every country has its own restrictions….we adhere to them and respect sensitivities,” said Diageo’s Ewing, on the impact of religious restrictions on alcohol in the region, adding they have been no hindrance to doing business.
Despite brisk sales, the religious and social taboo linked to alcohol consumption makes for an uneasy balance in a region where alcohol-related infractions result in severe legal action.
Newspapers are filled with reports of public drunkenness leading to jail terms for expatriates as well as tourists, particularly in glitzy Dubai where hotels entertain customers with their best spirits.
Recently, a 37-year-old British tourist who went to the police station to report the loss of his passport at a Dubai-based bar was arrested for illegally consuming alcohol — since he was not a resident and had no alcohol license, he should not have been in the bar, prosecutors argued.
“Dubai is struggling between upholding the Islamic laws while trying to project the UAE brand to be associated with openness,” said Marco Blankenburgh, international director for Knowledgeworkx, a UAE-based consulting firm that specializes in cross-cultural issues.
“The law is not always clear but expatriates and tourists have to remember that they are in a Muslim country.”