The cost of dining out in Dubai is increasing, particularly when it comes to alcoholic beverages, with the city now ranked as the third-most expensive globally for a half-litre of draught beer, averaging $10.89, according to a survey by Numbeo. Qatar and Oman top the list, and this ranking was established before the reintroduction of a 30% alcohol tax at the start of 2025.
Dubai’s alcohol market is controlled by a duopoly, with only two suppliers: Maritime and Mercantile International (MMI), a subsidiary of Emirates Group, and African & Eastern, a joint venture between local investors and AB InBev. This limited competition, combined with high taxes and levies, has led to concerns that restaurants are pricing themselves out of the market, says Naim Maadad, founder of Gates Hospitality. He stresses the need to open up the alcohol supply market to reduce the burden on consumers.
Along with alcohol pricing, other rising costs—such as labor—are also putting pressure on restaurants’ profit margins. Stefano Mihalitisianos, Middle East managing director of Tasha’s Group, mentions that rising input costs are driving prices up across the board, leaving restaurant owners with little choice but to pass those costs on to customers.
While inflation in Dubai remains relatively low at 2.9% year-on-year, food and beverage inflation rose to 1.3% in December 2024, adding further strain to the hospitality sector. Despite these challenges, the UAE’s food services sector is expected to reach a value of $23.2 billion this year and grow to $52.7 billion by 2030.
Dubai Economy and Tourism officials have encouraged restaurants to be mindful of their pricing, but have acknowledged that the market operates freely. The challenge remains for restaurants to balance profitability with attracting both tourists and residents.
