Why Coffee Costs So Much In Dubai

A cappuccino from one of Dubai’s countless cafes costs more on average than in nearly all of the world’s most expensive cities.

User-compiled data last year on price comparison site Numbeo, showed that a cappuccino bought in Dubai cost an average of Dh16.46. Meanwhile, in Hong Kong, ranked as the city with the world’s highest cost of living, the same cappuccino costs only Dh16.

Among the top ten cities on the list, put together by New York-based consultancy Mercer, just two cities — Zurich and Kinshasa — had dearer coffee.

If you live in the latter, which is the Congo’s incongruously costly capital, you will have to shell out the eye-watering sum of Dh23.25 for a brew.

Back in Dubai, industry professionals and experts say that the large numbers of wealthy expats, coupled with foaming demand, have caused the perk in prices.

Long a cultural ritual for both Emiratis and Westerners, people in the city tend to drink more of the beverage, according to a spokesman for Eurocoffee, one of the UAE’s largest distributors.

“High consumption [and] demand for coffee is linked to high income levels,” said Roshan Galani. His firm supplies the popular Italian Lavazza brand to around 500 coffee outlets across the UAE.

Hot hospitality

Both disposable incomes and demand for high-quality coffee rose over 2015 and 2016, a report by Euromonitor noted. The market research firm noted a surge in licences issued to UAE cafes in the same period.

A “strong presence” of Arab expats in the UAE has also boosted sales of freshly roasted takeaway beans, noted Gil Barcelon, a Euromonitor analyst. “Arabic culture dictates that as a sign of hospitality and welcome, one should serve coffee to guests,” he added.

For coffee lovers, the high price of the habit shows no sign of losing steam. And while a syrupy-sweet cup of milky Nescafe can be bought at cafeterias around the city for Dh2 or less, many residents prefer more upscale brews at Western chains.

“If you appreciate the taste of strong coffee, it’s good to go outside to get it,” said Mounir, a Tunisian expat, who sips an espresso at Caffe Nero outlet in Dubai.

“I’ve been to New York and London, and I have noticed [coffee] is more expensive than in Dubai,” he added.

For others, drinking high-priced coffee is just a cost of doing business.

“Where I come from, we’re more tea drinkers,” said Shahid, a sharp-suited financial adviser who nurses a Starbucks latte while he waits for a meeting with a prospective customer.

He laughs. “But in front of clients, you have to have coffee.”

source : gulfnews