For Aussies, doing it yourself is in your DNA. I’ve lived there myself and seen firsthand how the ‘have a go’ attitude works.
So why can’t you distill alcohol yourself in Australia? Why do you need a license?
This article will answer the questions you have regarding the cost of a distillery and the licenses you need to have in hand to start a distillery business.
Table of Contents
Is Distilling Alcohol Legal In Australia?
Distillation of alcohol without a license is completely illegal in Australia – no exceptions. However, brewing beer, wine, or cider for personal use is perfectly legal since the laws were changed in the 1970s.
If you want to distill alcohol legally in Australia, you’ll need to register with the ATO for excise tax (here), and pay tax on all alcohol produced.
Is it legal to own a still in Australia?
Not really. It’s illegal to buy, own or sell a still with a capacity of more than 5 liters. It IS legal however to own a still less than 5L, provided it’s for the distilling of water or essential oils (i.e. not alcohol!). If you own a still larger than 5L you’re liable to be fined up to $8,500.
If you wish to own a larger still than this, you will need to register it with the ATO, and they will most likely not allow it if you’ll be doing so for personal use.
If you want to distill alcohol in your still that’s smaller than 5L, then you’ll need to register for excise tax (see above) and pay tax on any alcohol produced.
To register your still, you will need to go to the ATO website (here) and complete the registration form.
What Is A Distilling License?
A distilling license is legal permission granted to you by the Australian federal government (via the ATO) so that you can manufacture distilled spirits. The term “distilled spirits” refers to alcoholic beverages made from fermented grains or fruits, such as whiskey, gin, vodka, and brandy. Once granted, the license allows you to sell your product to the consumer or retailers licensed to sell liquor.
How To Get A Distilling Licence In Australia
You need a license to distill alcohol in Australia. If you don’t have a license, you can be fined up to $85,000 or face up to two years imprisonment. To apply for a license, head over to the ATO website (here) and begin the application process.
How Much Does A Distilling License Cost In Australia?
A distilling license is free. But, you have to pay taxes on any alcohol you distill and sell to consumers. To obtain the license, you need to have a registered business so the Australian Taxation Office can track and monitor if you’re paying taxes for the amount of liquor distilled.
What Other Licenses/ Approvals Do You Need To Make And Sell Alcohol?
Listed below are licenses you may need apply for to make and sell alcohol.
Producers License
A producers’ license allows you to:
- Supply alcohol products to other license holders.
- Provide liquor at your premises for customers to consume on and off-premises.
- Deliver alcohol to customers.
- Sell alcohol from other retailers.
- Provide online purchase services for customers.
NOTE: To qualify for this license, you must brew the beer you’ll be selling. And if you intend on selling wine, cider, or brandy, you must use fruit grown in Australia.
Promotional Event Authorisation
This authorization allows you to sell alcohol at promotional events (festivals and carnivals). Once approved, you can attend as many events as you desire as long as you adhere to the restrictions of the events.
Excise License
The excise license ensures that you’re liable to pay any taxes due for any liquor you produce and manufacture. For this application to be successful, you need to provide a report to the Australian Tax Office stating:
- How you’re going to calculate your alcohol by volume for your products.
- The amount of alcohol you’ll produce annually.
- The type (and size) of packaging you’ll use.
- The percentage between kegs and packaging you’ll be selling to your customers.
Commercial Hotel License
This license is ideal when you’re planning on selling liquor on and off licensed premises such as hotels or taverns. The license allows you to:
- Provide meals and accommodation.
- Provide catering facilities for functions on your premises.
- Sell alcohol during ordinary and extended business hours.
- Provide take-away liquor during business hours.
- Sell liquor to guests (and residents) to consume on your premises after trading hours.
Bar License
A bar license allows you to sell liquor on premises where you can accommodate a maximum of 60 customers.
Industrial Canteen License
An industrial canteen license is ideal for selling alcohol in remote locations for employees.
Artisan Producer License
To qualify for this license, you need to produce craft beer of 2500- 5 million liters and spirits of 400- 450,000 liters annually.
Commercial Special Facility License
You obtain this license for selling at airports, casinos, and convention centers.
Community Club License
This license permits you to sell at sporting, RSL, and ethnic clubs.
Nightclub License
If you provide on-premise entertainment and serve liquor, apply for this license. If not, you’re only allowed to sell alcohol up to 5 pm.
Wine Producer License
A wine producer’s license allows you to:
- Sell wine for tasting and consumption purposes on-premise.
- Off-premise consumption of wine.
- Sell another wine producer’s liquor on and off licensed premises.
How Much Does An Alcohol License (Liquor License) Cost In Australia?
The table below breaks down the cost of a liquor license in Australia.
| New License | 17 revenue units ($21) |
| For one or more authorities | 166 revenue units ($205) |
| To add more authorities | 166 revenue units ($205) |
| Application to vary a license to substitute premises for licensed premises for the approval of material transfer a liquor licensed wholesaler of liquor (1 year) | 83 revenue units ($102) |
Source:Northern Territory Government of Australia
How Much Is The Tax On Alcohol In Australia?
Tax on liquor is based on the bottle you buy and the tax you pay on the spirits you produce. According to the Australian Taxation Office, the rate increases every six months. The rates as of February 2022 are provided in the table below.
Beer
| Tariff Subitem | Description (% refers to the volume of alcohol) | Unit | February 2022 |
| 1.1 | Not exceeding 3% individual containers, (less than 8 liters) | $ per liter of alcohol | 46.02 |
| 1.2 | Not exceeding 3% of individual containers, over 48 liters | $ per liter of alcohol | 9.20 |
| 1.2 | Not exceeding 3%, 8-48 liters. | $ per liter of alcohol | 9.20 |
| 1.5 | Not exceeding 3.5%, less than 8 liters. | $ per liter of alcohol | 53.59 |
| 1.6 | Not exceeding 3.5%, over 48 liters | $ per liter of alcohol | 28.82 |
| 1.6 | Exceeding 3%, 8-48 liters | $ per liter of alcohol | 28.82 |
| 1.10 | Exceeding 3.5% | $ per liter of alcohol | 53.59 |
| 1.11 | Exceeding 3.5% | $ per liter of alcohol | 37.76 |
| 1.11 | Exceeding 3.5%. 8-48 liters | $ per liter of alcohol | 37.76 |
| 1.15 | Produced for non-commercial purposes using commercial equipment ( exceeding 3%) | $ per liter of alcohol | 3.24 |
Spirits
| Tariff Subitem | Description | Unit | February 2022 |
| 2 | Other excisable beverages not exceeding 10% by volume of alcohol. | $ per liter of alcohol | 90.78 |
Sprits And Other Excisable Beverages Exceeding 10% Volume of Alcohol
| Tariff Subitem | Description | Unit | February 2022 |
| 3.1 | Brandy | $ per liter of alcohol | 84.78 |
| 3.2 | Other excisable beverages over 10% volume of alcohol | $ per liter of alcohol | 90.78 |
| 3.5 | Spirit for fortifying Australian wine or grape | $ per liter of alcohol | Free |
| 3.6 | Spirit bought n quantities by pharmacists or for educational purposes | $ per liter of alcohol | Free |
| 3.8 | Denatured Spirits | $ per liter of alcohol | Free |
| 3.10 | Spirits not included elsewhere | $ per liter of alcohol | 90.78 |
What’s The Total Cost To Start A Distillery In Australia?
If you want to start your own craft or micro-distillery in Australia, you’ll need the following;
| Distilling Licence | Free |
| Excise Tax | $90.78 per litre of ethanol produced. |
| Goods and Services Tax (GST) | %10 of the sales price. |
| Liquor Licence (off-license) | $205 Annually. |
Conclusion
Starting a distillery business does not have to be a headache. Once you’ve gone through all the proper channels (like consulting with your local state) for acquiring a license, the rest of the process will be seamless and you’ll be well on your way to having your distillery up and running in no time.
Sources:
- Honey Comb Credit: How Much Does It Cost To Start A Craft Distillery?
- C & D Restructure and Taxation Advisory: Getting a License to Legally Distill Alcohol in Australia
- Northern Territory Government: Liquor Licence Fees
- Australian Taxation Office: Excise Duty Rates For Alcohol
- Australian Taxation Office: Application for a licence to manufacture alcohol
- Queensland Government: Types of Liquor and Wine Licenses
- Distillery King: Is It Illegal to Distill Alcohol in Australia
Reading article on setup costs for a distillery .
Bit confused. Please help.
Excise Tax $90.78 per litre of ethanol produced + GST 10% + manufacture + transport, distribution, sales etc.
Wouldnt that render selling price of a 700ml bottle of spirit significantly more than the entry level prices in shops of $30-40? (Even at 35% ethanol)
You’re absolutley right, and it’s gone up to 97.90 now! On that $40 700ml bottle, $27 will be excise tax, $4 will be GST leaving only $9 for manufacturing, transport, and the producer and retailers proffit. Its nuts