Is it illegal to distill alcohol in Australia?

NO! It is NOT illegal to distil alcohol in Australia. Distilling is like driving, it's perfectly legal so long as you have a license. And depending on the purpose of the alcohol you are distilling, it's possible you don't need a licence at all.

People assume 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 distill to drink (as opposed to alcohol you distill to make hand sanitiser, or essential oils, or anything else that does not attract excise).

This is because of a law passed in 1901 where the government at the time decided home brew was illegal, determined as a grain based liquor with more than “two points” {%} of ethanol. Gough Whitlam went on to change the law in early 1970’s to make it OK to brew beer and wine, but still you have to pay tax on any alcohol that is distilled for drinking, even if it's for personal consumption in your own home. This is where things get a bit weird. If you try to get a license to distil alcohol at home for your own personal consumption, the ATO will not give you one. This is because they have no way of knowing how much alcohol your distilling and drinking at home (remember excise is only applicable on alcohol you distill to drink). If you have a business on the other hand, and are selling the alcohol you make, the ATO can see how much you're selling and how much excise you're paying to make sure those two things match. If you are a business, the ATO will generally have no issues granting you the license, so long as you can meet all their criteria.

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 80% less when you take the tax off. Based on the February 2024 excise rate of $101.85 (it goes up every 6 months) a 700mL bottles of 40% alcohol has $28.52 of excise attached to it. If that's a $40 bottle of vodka from Dan Murphy's, there is also $3.64 GST in that. The total tax paid is $32.16 which means the distiller, distributor and retailer share the remaining $7.84. That's how much that bottle of vodka 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 two stills, the Air Still and the Air Still Pro, which are 4L. If you intend on using the Air Still to distil water, make essential oils, herbal tinctures or anything else that is not alcohol, you don't need a license from the ATO. Go for gold. If you use the Air Still to produce alcohol for drinking or otherwise, 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 parents 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. 

In summary:

• Want a still over 5L? You'll need to Get Permission
• Planning to produce alcohol to drink? You need an Excise Manufacturer License

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!

PS: If you have any questions about this article please contact us here, we are alway happy to help 😊