Is it illegal to distil alcohol in Australia?

Is it illegal to distil alcohol in Australia?

NO! It is NOT illegal to distil alcohol in Australia. Distilling is like driving, it's perfect legal so long as you have a license. 

People presume the license has to do with safety, that the government wants to make sure we're distilling spirits safely. This could not be further from the truth. The license is actually issued by the Australian Tax Office (ATO). It's completely free, and the catch? You have to pay tax on the alcohol you produce, even if it's for personal consumption in your own home. This is because of a law passed in 1901 where the government at the time decided it was OK for beer, cider and wine to be produced tax free at home for personal use, but spirits were not. Crazy right? But hey, the law is the law and taxes are important.

This tax is built into every bottle of spirits you buy so it's not a special tax on home made spirits. If you do the calculations, you'll find your favourite spirits cost up to 90% less when you take the tax off. Based on the February 2018 excise rate of $83.84 (it goes up every 6 months) a 700mL bottles of 40% alcohol has $23.48 of excise attached to it. If that bottle costs $30, there is also $3 GST. Total tax is $26.48 which means the distiller, distributor and retailer share the remaining $3.52. That's how much that bottle of liquor actually costs.

There are a couple things to go over here. This first is permission for your still. If you buy a still 5L or under, you don't need permission from the ATO to buy it. We also don't need permission from the ATO to sell it. That's why we only sell one still, the Air Still, which is 5L. If you intend on using the Air Still to distil water, make essential oils, herbal tinctures or anything else that is not for drinking, you don't need a license from the ATO. Go for gold. If you use the Air Still to produce alcohol for drinking, you need an excise manufactures license from the ATO and you need to pay tax on that alcohol. 

But 5L is pretty small right? As our mothers always said, if you're going to do something, do it properly. That's why we sell 25L boilers and condensers that can be attached to each other to make a still, like the Turbo 500. Because these two things are not attached when you purchase them, you don't need permission to buy them and we don't need permission to sell them. You will however need permission to "manufacture" a still before attaching a condenser to a boiler over 5L. You will need this permission even if you're not using the still to produce drinking alcohol. If you're going to use the still to produce drinking alcohol, you need an excise manufactures license from the ATO and you need to pay tax on that alcohol. 

There is some good news. From 1st July 2017, you can claim a refund of 60% of the excise duty you have paid on spirits you have distilled. The maximum refund you can claim is $30,000 per financial year and it must be made within 12 months of paying the excise duty.

In summary:

The most important thing is, don't be scared! The ATO are really friendly and helpful. Make sure you buy the right equipment and use the right ingredients to ensure you're distilling safely. Using our equipment and distilling yeasts, you'll only be producing safe to drink ethanol, rather than poisonous methanol. The methanol content in our washes is so low, it can't even be detected.

There is more methanol in a glass of orange juice than in your average 25L sugar wash. The fores and heads (what we call the first part that comes out of the still) contain a higher concentration of acetone, methyl ethyl ketones and a few other higher alcohols that you don't want to drink as they cause killer hangovers. By discarding the first 50mL of a 25L wash, you're getting rid of this and the bulk of the methanol, leaving behind safe drinking pure ethanol.

Beer, wine and most spirits from the bottle shop do in fact have methanol inside, the worse the hang over the higher the methanol content of what you're drinking. Distilling your own alcohol properly with the right equipment and ingredients will produce an even cleaner, safer drink than you can buy commercially. Happy distilling!

If you have any questions about this article please contact us here.

Is it illegal to distil alcohol in Australia?

Previous article Fermenting Better Spirits
Next article Making Spirits - Your Questions Answered


Paul - April 1, 2019

i have spoken to the ATO and have got the permission to own a still, it was very easy and the ATO are easy to deal with. We got the still first for making essential oils to sell through our business, the lady at the ATO said to me that if i wanted to make spirits for my own use also they didnt want to know about it. They only wanted to know if i was making enough to sell. The whole ATO experience was easy and of no concern when your up front with them.

pete - November 13, 2018

TROY, that litre of ethanol will make over 3.33 ,,750ml bottles at 40 % by vol, which is about $24:85 per bottle
And JACK, there are some vine making courses etc that may include brandy, in Nuriootpa, the barossa valley in general, the nuriootpa high do vintner courses but im not sure if the accept older students.

Ryan - November 13, 2018

So what idiot is actually telling the ATO they are making spirits?

Robin - November 13, 2018

I’ve seen quite a few home stils, and they sure aren’t coughing up the blackmail the ATO is standing over people for.

Adam - January 14, 2018

I have been told by the ATO that I need a licence to distill for making spirits used in herbal tinctures. I must apply for an exemption on paying TAX on the products im selling which is another form to fill out.

Jason - December 6, 2017

@Troy, the alcohol you buy at the bottl-o, say a bottle of whiskey is a 700mL bottle, at approx 40% alcohol. $82.76×0.7L = $57.932, however it is only say a max of 40% alcohol.. $57.932×0.4 (40%) = $23.1728 duty/tax at full rates on a 700mL bottle at 40% alcohol.
There may also be some discount/refund on that price to the distilleries too.

Distillery King - November 25, 2017

@Troy, that tax rate is correct, but it’s not more expensive than buying spirits at the bottleo – that tax is built into all the spirits you buy.

Distillery King - November 25, 2017

@Darren, you still have to pay tax on alcohol you produce for personal consumption,

Troy - November 23, 2017

Am I reading the excise prices correctly as $82.76 per liter of alcohol manufactured even for home use? and even with the 60% refund still is priced more than most liquors at the bottleo? What is the best way for people who are interested in experimenting with different types of home brewed alcohol

Still - November 20, 2017

I ‘still’ don’t get it

Leave a comment

Comments must be approved before appearing

* Required fields