Stores look beyond Dubai
Channel Distribution, part of the Bhatia Brothers Group, has announced that it will open more retail stores across the region in order to compete with alcohol stores already in the market
Channel Distribution, part of the Bhatia Brothers Group, has announced that it will open more retail stores across the region in order to compete with alcohol stores already in the market. Currently serving more than 400 people per day at its existing alcohol stores in Ajman and Umm Al Quwain, the forthcoming openings will give the company access to the increasing expatriate community.
“We have been operating alcohol stores for the past 25 years, but we are seeing a massive growth of business due to Municipality regulations in Dubai,” said Leonard Menezes, head of business development, Channel Distribution.
Because Dubai residents need an alcohol licence in order to purchase beverages from either MMI or a+e stores, Channel Distribution operates outside of Dubai to serve customers that do not have a licence. The popularity of its existing stores has encouraged the company to expand its operations to Fujairah, where it has just won a duty free licence.
“Fujairah is becoming increasingly important, as more people are visiting this emirate, so it is the next logical step for us. Also, we use the port in Fujairah to bring in our products, so it works out cheaper as well,” said Menezes.
Alcohol entering the UAE through Dubai currently has a 30% Municipality tax imposed on it, so Menezes added that alcohol purchased from the Northern Emirates is cheaper. Additionally, as Jebel Ali port has a stamp duty of 50%, the cost of importing and distributing beverages from Dubai is proving expensive.
In order to compete with the rise of alcohol stores in the Northern Emirates, however, Dubai-based MMI has also opened a retail store in Ras Al Khaimah to compete directly with distributors in Ajman, Umm Al Quwain and Ras Al Khaimah.
“We operate nine stores in Dubai, but because of regulations we can only sell alcohol to people who have licences,” commented John Nickson, retail operations manager, MMI.
MMI currently has 18,000 licences registered in Dubai. However, with more people willing to travel to the Northern Emirates, it has realised the benefits of also having a store there as well.
“The new store will simply give the market more choice. Of course, the prices will be in line with our competitors in the region, as we won’t have to add the Municipality tax on our products. However, we don’t expect this new store to take business away from our Dubai outlets. Dubai is growing at a rapid rate so we predict that business will remain stable, with the outlet in Ras Al Khaimah giving us a larger client base,” said Nickson.
“There is enough business for us all, and it also means that customers have more choice, whether for spirits, beers or wines,” Nickson added.