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“Not every alternative route to market available to other consumer goods is open to alcohol,” says Tyrone Reid, group CEO of MMI and Emirates Leisure Retail. As shipping disruption caused by the ongoing regional conflict stretches delivery times and pushes up logistics costs, those restrictions leave drinks distributors with fewer ways to keep Dubai’s hospitality venues supplied.

It’s a problem that’s being felt across the UAE, with many customers taking to social media to lament their favourite drink being 86’d. Reid points to disruption through the Strait of Hormuz and port congestion as reasons some products across all categories are taking longer to reach the UAE. Freight, insurance and alternative routing costs have also risen significantly, he says.

“Our products are excluded from the green-belt route established via Oman, for example, and routing through markets such as Saudi Arabia isn’t an option either,” he explains.

“For a business like ours, with a portfolio sourced from producers all over the world, that inevitably adds complexity, time and cost. Our focus is on absorbing as much of that complexity as we can behind the scenes, so that the impact on our customers and consumers is kept to a minimum.

“In practice, that means working very closely with our suppliers and logistics partners, reviewing forecasts and stock positions far more frequently and planning further ahead.”

Despite the challenges, MMI is also exploring opportunities to hold inventory closer to the UAE to reduce transhipment times and help keep its hospitality customers stocked.

“We have also continued to invest in inventory, increasing our stock cover during this period to support the industry and reduce out-of-stocks. But continuity isn’t only about our own inbound supply. When another distributor runs out of a brand, we often see an unplanned spike in demand for comparable brands in our portfolio,” says Reid.

He describes a response built around constant communication: “Day to day, we are tracking stock and inbound shipments closely, forecasting and planning more often and over a longer horizon, and staying in constant dialogue with suppliers, logistics partners, port authorities and customers so we can spot potential pressure points as early as possible.”

Reid also notes that infrastructure investment is ongoing and intended to make stock easier to manage.

“Our new state-of-the-art warehouse holds both duty-free and duty-paid inventory under one roof, which gives us far greater flexibility to optimise stock levels and move inventory quickly and accurately across our different channels.

The warehouse has temperature-controlled chambers ranging from 5°C to 18°C. Alongside it, MMI is investing in two systems to improve supply-chain planning and a warehouse management system. But Reid acknowledges that quality also carries a cost. 

“We work closely with suppliers and logistics partners across the end-to-end journey, and make extensive use of reefer containers and temperature-controlled transport where required. That comes at a higher cost, but maintaining the right conditions throughout the supply chain is critical to protecting quality and, ultimately, our customers’ trust.”

For operators facing availability gaps, Reid sees the breadth of MMI’s portfolio as an advantage. Around 8,000 brands offer restaurants and bars alternatives, although matching a replacement requires understanding the original product’s role.

“The objective isn’t simply to swap one product for another; it’s to protect the quality and integrity of the guest experience,” he says.

“Our teams bring deep product and category knowledge, and the earlier we’re in conversation with an operator, the more options we have to plan around constraints and avoid disruption at venue level.”

Those conversations also shape forecasts. Operators flag openings, events, menu changes and busier periods, while suppliers and logistics partners provide information from further along the supply chain.

“No business can remove every external risk, particularly in circumstances like these. But strong relationships, capable people, better systems and open communication allow us to see challenges earlier and respond faster. For me, resilience is ultimately built on visibility, communication and trust at every stage of the supply chain,” says Reid.

Local production is another part of the longer-term response. MMI and Sirocco, its longstanding joint venture with Heineken, are developing a large-scale brewery in Dubai – a regional first and a huge boon for the industry. 

Reid explains, “Once operational, it will allow a number of leading beer brands to be produced locally, giving customers fresher product and giving us greater flexibility to respond to local demand.”

The brewery would also reduce reliance on international sea freight for those beers, adding protection if shipping disruption continues. Reid is cautious about predicting when shipping conditions will normalise.

“I think the last few years have taught all of us that building resilience matters more than trying to predict exactly when things will return to normal. Some factors in the current regional situation are entirely outside our control, and it would be difficult for any business to put a definitive timeline on when shipping conditions will fully normalise.

“What we can control is how prepared we are and how quickly we respond.”

Reid remains positive about UAE hospitality’s long-term outlook. MMI’s task is to keep improving its ability to support operators, whatever external conditions bring.

“When the hospitality industry thrives, MMI thrives with it.”

Click here to read the original article by Caterer.