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Saudi Arabia’s first liquor store was opened in the diplomatic district of its capital, Riyadh, available to non-Muslim diplomats.
Even if it’s just for one group, it’s a great replacement for the very conservative Muslim kingdom, where alcohol has been banned since 1952 after a Saudi prince murdered a British diplomat while intoxicated. Alcohol intake is also forbidden by Islam and most of the local population of Saudi Arabia is religious.
That hasn’t stopped alcohol from flowing into the kingdom over the years — it just happened behind closed doors.
Foreign embassies can import alcohol under express agreements with the Saudi government, while some have smuggled alcohol into the kingdom in secure “diplomatic bags” that cannot be inspected.
From there, the bottles are sold on the black market at massive markups, according to expats and local citizens of the country. All of those who spoke to CNBC did so on condition of anonymity because of the sensitivity of the issue.
“Everyone knows which embassies sell booze … some of them have made a whole side business out of it, selling on the black market at four, five, even ten times the normal price. It’s gotten ridiculous. The government had to do something,” one Saudi investor based between Dubai in the United Arab Emirates and Riyadh told CNBC.
A one-liter bottle of vodka, for instance, typically costs between $500 and $600 on the black market, sources said, while they described a single bottle of Johnnie Walker Blue Label going for between $1,000 and $2,000. At-home booze making has also taken place in the kingdom for decades, according to expats who’ve previously lived there.
The new store in Riyadh is subject to strict rules: the mission of entering and buying will need to be validated through an app called Diplo and approved by the Saudi Ministry of Foreign Affairs, and purchases are subject to a monthly fee formula consistent with registered consistent conson.
The new tracked procurement formula aims to “solve the smuggling challenge we’ve had with diplomats,” a Saudi representative said. Another Saudi businessman founded in the Khobar region in the east of the kingdom told CNBC: “The government has learned that much of the alcohol flows from the amounts allocated to embassies to the black market. Your allocated amount is tracked from a centralized location. “
In fact, the Saudi government has shown that the regulation of alcohol quotas for diplomatic missions is being prepared to “combat the illicit industry of alcoholic products,” the country’s International Communication Center said in a quote quoted by CNN.
Saudi Arabia’s Foreign Ministry and the CIC responded to CNBC’s requests for comment.
Expats have often gone to lengths to get liquor into the dry kingdom; one former British diplomat recounted receiving bottles of whiskey stored inside an imported grand piano, while another described the moment that a company shipping his furniture told him, “Sir, your couch is leaking.”
Saudi Arabia imposes harsh consequences on those caught drinking or promoting alcohol, ranging from fines or whipping to deportation and prison sentences.
Still, many others in the kingdom say legalizing alcohol consumption outside of diplomatic venues is only a matter of time, though it will most likely be limited to hotels or special economic zones and banned for Muslims. Riyadh and Jeddah are already stocking up on fully stocked bars, which have lately been used to make elaborate mocktails.
Saudi Arabia has undergone seismic change both socially and economically in the years since the young Crown Prince Mohammed bin Salman, now the kingdom’s de-facto ruler, came to power.
His Vision 2030 crusade is a multibillion-dollar effort to reshape the Gulf country’s image, attract tourism and diversify its economy away from oil. It also aims to create new jobs for Saudi Arabia’s burgeoning youth, 70% of whom are minors. of 30.
The kingdom has seen a series of liberal reforms implemented since Crown Prince Mohammed came to power, allowing in the past banned activities such as female car driving, cinemas and music festivals.
But alcohol in Saudi Arabia has always been a taboo subject — while the country’s leadership wants to modernize it and bring in more tourism and foreign investors, it also has to keep from upsetting its domestic population, most of which is deeply religious.
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