UAE Retail Market Opens Doors to Georgian Agricultural Products: Enhancing Food Security and Economic Growth

Published Aug 2, 2024

The UAE is a global retail hub renowned for its malls, various goods, and tax-free shopping environment. The UAE's retail sector is a pivotal contributor to the economy, with high discretionary incomes, a growing expat community, and a robust tourism industry. The UAE recently permitted importing Georgian agricultural products to diversify its food supply and ensure food security. Notable for its fertile soil and climate, Georgia produces various high-quality agricultural products such as fruits, vegetables, nuts, and wines. The UAE's strategic location enables Georgian products to reach other Middle Eastern and international markets. Georgian agricultural products entering the UAE market are projected to boost competition among suppliers, resulting in reduced prices and more outstanding quality for clients. This program contributes to the UAE's goal of becoming a global food security hub by strengthening bilateral economic ties, attaining food security objectives, and creating new opportunities for Georgian farmers.

The United Arab Emirates (UAE) has long been known as a worldwide retail hub, luring customers worldwide with its large malls, broad product offers, and tax-free shopping environment. The UAE's retail sector contributes significantly to the country's economy, thanks to a mix of high discretionary incomes, a growing expatriate community, and a strong tourism industry.

Overview of the UAE Retail Sector

The UAE's retail sector is known for its diversity, which includes everything from high-end luxury brands to common consumer items. Major emirates like Dubai and Abu Dhabi have some of the world's largest shopping complexes, including The Dubai Mall and Mall of the Emirates. These retail behemoths not only provide a diverse choice of merchandise but also entertainment and culinary offerings, making them attractive destinations for both locals and visitors. The UAE retail sector has also shifted significantly toward e-commerce in recent years, owing to increased smartphone usage and internet availability. Online shopping sites like Noon and Amazon have gained significant market share, allowing individuals to shop from the comfort of their own homes.

Recently Approved Georgian Agricultural Products

In a significant development, the UAE recently permitted importing Georgian agricultural products into its market. This action is part of the UAE's overall strategy to diversify its food supply and ensure food security. Georgia is known for its lush soil and suitable climate, and it produces a diverse range of high-quality agricultural products, including fruits, vegetables, nuts, and wines.

The clearance of Georgian agricultural products will likely have various benefits for both the UAE and Georgia. For the UAE, it means having access to a new source of fresh, high-quality produce, which will assist in meeting the growing demand for healthy and organic food options. This is especially crucial for the UAE, where harsh desert conditions make local agriculture production difficult. For Georgia, entering the UAE market represents an immense potential to broaden its export base and improve agricultural revenue. Because of the UAE's strategic location as a commercial hub, Georgian products may be able to access other Middle Eastern and international markets. The regulation came into force on June 26, 2024, allowing the UAE to import Georgia's essential products, such as beef and lamb, honey, almonds, mineral water, canned fruits and vegetables, soft drinks, and other agro-based products.

Figure 1: Production Data of Almond Kernel in Georgia

Source: Tridge

Potential Market Impacts

The entry of Georgian agricultural products into the UAE market is expected to increase competition among suppliers, potentially leading to lower pricing and higher quality for customers. Retailers in the UAE may also benefit from the broader range of products they provide, attracting more customers and driving up sales. In recent events, representatives of LuLu Group International from the UAE met with Georgia officials to discuss further expansion of trading possibilities. LuLu Group operates in 23 countries (the Persian Gulf, the Middle East, Asia, America, and Europe), owning the LuLu retail chain (248 hypermarkets and 24 shopping malls) and distribution organizations. The company's annual revenue was USD 9 billion in 2023. Lulu officials expressed interest in Georgian fruits, vegetables, dried fruits, almonds, lamb, and other items from Georgia’s agricultural portfolio.

Figure 2: Lulu Mall Store

Source: Zawya

This initiative supports the UAE's goal of becoming a worldwide food security hub. By diversifying its food sources, the UAE may lessen its reliance on a few suppliers while mitigating the risks of supply chain interruptions. It boosts bilateral economic connections, helps the UAE achieve its food security goals, and opens up new prospects for Georgian farmers. As the UAE's retail sector evolves, such strategic measures will play a growing role in shaping its future landscape.