Alcoholic drinks in Ethiopia faced a slight decline in total consumption in 2024, shaped by rising prices and shifting economic conditions. The overall contraction was largely driven by a series of fiscal and structural developments, including higher excise taxes on alcohol, a widening gap in the foreign exchange rate, and the impact of urban redevelopment initiatives that resulted in the demolition of bars and restaurants in key hospitality corridors. These factors combined to limit both supply and affordability, particularly in regions traditionally associated with high beer consumption.
Beer remained the largest category within alcoholic drinks in Ethiopia in 2024, although it faced notable headwinds in both volume and value terms. The dominant position of beer in the formal market came under increasing pressure due to inflationary effects and the rising popularity of alternative options such as hard seltzers and traditional drinks. Arada, a flavoured hard seltzer brand that gained strong traction among female consumers, notably challenged beer’s dominance. At the same time, a sharp price increase – reportedly in the range of 35% over the year – led many price-sensitive consumers to turn toward more affordable, traditional beverages. Structural changes within Addis Ababa also played a role. The city’s Corridor Development initiative, aimed at urban renewal through expanded infrastructure and pedestrian spaces, resulted in the demolition or relocation of several key hospitality areas known for high beer and wine consumption. This included parts of Bole, Kazanchis, and Bisrate Gabriel, where the closure of butcheries and drinking establishments disrupted longstanding community patterns of on-trade consumption and weakened the social networks that supported frequent alcohol use in these zones.
Heineken remained the leading company in Ethiopia’s alcoholic drinks industry in 2024, maintaining its dominance in the beer segment with a strong volume share. The company produces well-established brands such as Walia, Bedele, and Harar, and saw a stable performance throughout the year. Heineken’s leadership was further consolidated following its acquisition of Komari Beverages in October 2024, the producer of the Arada hard seltzer brand. This move expanded Heineken’s portfolio beyond traditional beer offerings and positioned the company at the forefront of innovation in Ethiopia’s evolving alcoholic drinks market. In the beer industry, Heineken continues to compete closely with Saint George Beer, while Dashen Breweries, Habesha Breweries, and Anbessa Brewery make up the next tier of competitors. In the spirits segment, National Alcohol and Liquor Factory held the largest share, followed by Balezaf Alcoholic Liquor Factory, with Marathon Spirits and VIV Beverages emerging as noteworthy local producers. Meanwhile, Awash Wine led the wine segment, ahead of Castle Winery, benefiting from the widespread popularity of its locally produced wine-based cocktail, Tekesheno.
Specialist alcohol retailers and wholesalers remained the leading distribution channel for alcoholic drinks in Ethiopia in 2024, holding the largest share of volume sales. This channel’s position was bolstered by its central role in both on-trade and off-trade sales. Most beer and spirits are routed through specialist sellers, who serve as intermediaries between producers and both individual consumers and on-trade establishments. While beer is primarily consumed in bars and butcheries, spirits – particularly traditional domestic varieties – are also popular in small-scale local bars. Imported spirits, in contrast, are typically sold for consumption in butcheries and nightclubs, which remain key venues for on-trade sales among urban and affluent consumers. Traditional grocery retailers, known locally as souqs, do not typically stock alcoholic beverages due to religious reasons, as many are owned by members of the Muslim community. This further reinforces the importance of specialist sellers in distributing alcohol, especially in urban neighbourhoods where demand remains strong despite economic constraints.
A clear transition from on-trade to off-trade consumption was observed in Ethiopia’s alcoholic drinks landscape in 2024. This shift has been primarily driven by rising inflation, ongoing currency depreciation, and the increasingly prohibitive impact of excise taxes, which have reduced disposable income and consumer spending power. As a result, more consumers are opting to purchase alcoholic beverages for home consumption, particularly beer and traditional spirits, which are often cheaper when bought off-trade. In urban centres like Addis Ababa, the redevelopment of former high-consumption corridors – such as Kazanchis, Bole, and Bisrate Gabriel – has also played a role. The removal or relocation of bars, butcheries, and nightclubs from these areas has significantly limited access to familiar on-trade venues, encouraging a shift toward at-home drinking through neighbourhood-based alcohol specialists or informal retail.
Volume sales of alcoholic drinks are set to remain largely flat over the forecast period, with any potential growth likely to be constrained by ongoing economic pressures. Although the population is projected to grow and urbanisation is expected to increase, these underlying demographic factors may not be sufficient to offset the dampening effects of inflation and high taxation. While demand for alcoholic beverages will likely remain robust, rising prices and diminished purchasing power are expected to drive continued downtrading. Consumers are anticipated to switch from imported to domestic spirits and increasingly turn to traditional alcoholic drinks such as Tej, Tela, and Areqe, which are not only cheaper but deeply embedded in local culture. At the same time, imported spirits are forecast to lose further ground, as affordability worsens and domestic brands improve in quality and image, especially those positioned as export-standard products.
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Alcoholic Drinks
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
See all of our definitionsThis report originates from Passport, our Alcoholic Drinks research and analysis database.
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