A Booze Ban Since the ’50s Is Being Quietly Lifted in Saudi Arabia

The Islamic kingdom is quietly loosening its laws against alcohol as part of a push to modernize and attract tourists.

Saudi Arabia is quietly permitting some residents to buy alcohol, breaking a longstanding taboo as the Islamic kingdom looks to expand its tourism sector, attract high-earning expatriates and modernize its conservative image.

In Riyadh, some non-Muslims have recently been able to buy booze.

Without making an announcement, the government in recent weeks has begun allowing non-Muslims with the premium residency status given to skilled or wealthy expatriates to buy beer, wine and spirits at a store in the country’s capital, Riyadh, according to people familiar with the matter.

baseuri="https://blankpaper.htdigital.in/wire-images/">The kingdom is expected to follow that first step by allowing alcohol at exclusive hotels and resorts along the Red Sea coast, which it has built up as a destination over the past few years, according to analysts and people familiar with Saudi rulers’ thinking. The introduction of alcohol sales has been in the works for years.

“We always knew it was coming, that Saudi was preparing for something,” said Michael Ratney, who served as U.S. ambassador to the kingdom under the Biden administration. “One thing was just the physical signals—you would go into new restaurants, and they all had bars. The bars didn’t have alcohol, but the infrastructure was starting to pop up.”

The liberalization around alcohol follows other modernizing steps over the past decade under Crown Prince Mohammed bin Salman, including lifting the ban on women driving, allowing cinema and music festivals, and reining in the country’s morality police, as he looks to position the country as a modern destination for investment and diversify its economy.

Saudi Arabia is selling itself on the global stage as a center for major sporting events. It has attracted soccer stars like Cristiano Ronaldo to play in its national league, and is slated to host the World Cup in 2034. The kingdom also began hosting the Saudi Arabian Grand Prix Formula One race in the coastal city of Jeddah in 2021. In other countries, such sporting events are usually accompanied by boozing—and often a lot of it.

Alcohol was banned in the kingdom in the 1950s after a drunk young Saudi royal shot dead a British diplomat. Islam, the official state religion of Saudi Arabia, the self-styled guardian of Islam’s holiest sites, also prohibits alcohol consumption.

A longtime expat in Saudi Arabia who recently bought alcohol from the only known liquor store in Riyadh said everything he learned about the booze-buying process in the capital has been through word-of-mouth.

Upon arrival at the unmarked liquor store in the Diplomatic Quarter, staff checked his residency card to confirm he wasn’t Muslim and that he qualified to buy alcohol through his residency status. They then made him put his cellphone in a sealed bag so he couldn’t take photos before allowing him to browse the store.

He said it had a decent selection, with household brands priced higher than in the West but lower than on the Saudi black market. Wine connoisseurs would have had trouble finding niche favorites, he added.

The change was exciting, he said, adding that drinkers are relieved to not have to resort to the black market, where dangerous homemade liquor and overpriced smuggled booze circulate.

With a tepid energy market and Saudi Arabia facing a budget crunch, the kingdom is looking for an influx of funds from foreign visitors and expats to help reduce its fiscal deficit. It has also scaled back ambitious infrastructure projects such as the planned multitrillion-dollar metropolis Neom.

Saudi Arabia is focused on “bringing in and retaining elites in the country and persuading tourists to come,” said Neil Quilliam, associate fellow at international affairs think tank Chatham House. “The economy is in a downturn. It will hit a few bumps in the road over the next year or so. The government is trying to prepare itself for that.”

The Saudi Foreign Ministry and government media office didn’t respond to requests for comment.

The crown prince has pushed rapid social change since being given the title in 2017. But lifting the countrywide ban on alcohol won’t happen all at once like some other modernizations. It remains a sensitive issue within Saudi Arabia’s large, conservative society and is likely to happen incrementally and with little fanfare.

“MBS is not insensitive to public opinion,” said Ratney, the former U.S. ambassador, using the acronym by which the crown prince is often known.

“And although I don’t think he wants the principal international identity of Saudi Arabia to be religious, as it has been known historically, he is very conscious of the fact that they own that,” Ratney said. “Still, he sees tourism, but also normalness, as his target.”

While Saudi Arabia’s government has liberalized in many ways, it still lags behind much of the world when it comes to human rights, in particular those of women and workers. The kingdom now allows gender mixing in restaurants and cafes, and has eased restrictions on women traveling and living independently.

But the Saudi state continues to carry out frequent executions, including for drug-related offenses, according to rights groups. It bans cohabitation for unmarried couples, harshly cracks down on dissent and considers homosexuality a crime.

Saudi Arabia likely will emulate the introduction of alcohol in the neighboring United Arab Emirates, according to analysts and people familiar with Saudi leaders’ thinking. While alcohol is limited in parts of the kingdom’s conservative Gulf neighbor and banned in the emirate of Sharjah, it flows freely in Dubai, which has attracted hordes of wealthy international tourists and a white-collar expatriate class in part by loosening moral restrictions.

Saudi Arabia is likely to follow that pattern, allowing alcohol in parts of the country while prohibiting it in religiously sensitive areas such as the holy cities of Mecca and Medina.

The kingdom and the U.A.E. have been feuding over their opposing positions in regional conflicts. Still, in economic and social matters, “Dubai is their benchmark,” Quilliam, the Chatham House fellow, said of Saudi Arabia. “They have to look at Dubai for everything.”

It’s unclear to what extent foreign investors will be able to get in on the act.

Alistair Paine, chief executive of Peninsula, a company that helps international businesses establish themselves in Saudi Arabia, said he has received an uptick of inquiries from clients trying to enter the kingdom’s liquor market.

“Everyone is really trying to unpiece the jigsaw and get some clarity as to what level of participation they’ll be able to have in it,” Paine said.

Write to Omar Abdel-Baqui at omar.abdel-baqui@wsj.com