How To Open a Distillery In Australia

Are you thinking of setting up a distillery in Australia? If so, it's an exciting and rewarding venture that could pave the way for a successful business. But there are several steps involved in getting your distillery off the ground – from obtaining licenses and permits to finding the right equipment and location and even learning about local laws related to production. 

In this blog post, we'll discuss everything you need to know about opening a successful distillery in Australia! We'll walk you through each step of the process with plenty of tips along the way to help make your dreams come true. So pour yourself a dram (or three), put on some tunes that inspire creativity and read on – because opening your own dream distilling business is within your reach!

Let's get started!

Don’t forget to grab a drink at Tar Barrel! With our range of craft beers, ciders and spirits - all made on the Distillery Mornington Peninsula using only the freshest ingredients – you’re sure to find something amazing. So come join us at Tar Barrel for an experience like no other!

Opening Your Distillery

When you initially start the process of establishing your own distillery and spirit business, there are two incredibly simple initial actions that every single person must complete for themselves before beginning the laborious task.

First things first: figure out your preferences.

Make a strategy to develop a spirit that you adore as well as a company that you are pleased to introduce to the rest of the world. To get started, have a conversation with your loved ones and close friends about the kinds of liqueurs and flavours that really excite you, as well as the kinds of things you would like to manufacture. If you are working on a topic you have a deep and abiding interest in, it will be significantly simpler for you to establish a name for your company or product.

Next, go ahead and enjoy a drink! Naturally, in a responsible manner! And most importantly, try out what other folks in that market niche are producing by tasting their distilled beverages. Try both the well-known, major names that dominate the industry as well as the up-and-coming craft brands that threaten to overtake them. 

Instead of simply enjoying a bottle with pals, visit your neighbourhood watering holes earlier in the week when they are less crowded and enquire of the bartenders and bartending staff what they prefer and what their clients are inquiring about. This is the kind of market analysis for which multinational corporations shell out millions of dollars. However, it is crucial to bear in mind that these companies require the knowledge to get beyond the bean counters and gatekeepers at their respective corporations. You should just keep an eye out for opportunities.

In conclusion, this is the most essential stage of the planning process. But, unfortunately, this is the point in the process where the vast majority of people give up after deciding what they are passionate about, investigating other options, and analysing each option's benefits and drawbacks.

Do it.

The expansion of the craft industry has given multinational corporations a new reason to be concerned. The old adage "large fish devour small fish" has been replaced with "quick fish devour slow fish" in today's culture. You are able to quickly transition from a chance to a delightful spirit that is bottled, which is one of your strengths in the industry. Therefore, move quickly to take the initiative, preferably before the more established competitors.

When using a more conventional approach to the construction of a distillery, the typical delivery period for your still is twelve months. The approval processes for licencing, taxation and permissions can require just as much time and occasionally even more. After that, you will be able to start the process.

If you want to start your personal distillery and spirit business, here are ten steps that will make the entire process go more quickly and be less difficult:

• First, consider the concept you have for a product and a company.

• Create the look and feel of your brand, then select the ideal container.

• Begin by distilling your goods so that they can reach their full potential.

• Develop a launch strategy and determine your path to the market.

• Improve the quality of your goods.

• Initial commercial distillation.

• Release it!

• Sell it!

• Continue making more.

• Construct your very own stillhouse!

Improve Your Research

This may appear to be a lot of fun, but when we say "research," we do not really mean going to the neighbourhood bar and knocking back a few gins. Okay, we drink some, but it can't just consist of downing a few gin and tonics every now and then. Read some books and educate yourself on the background of gin, the beginnings of distillation, how alcohol was manufactured, how it is made now, and how it is even used.

Understand not only the background of cocktails but also how to prepare them and what professionals are performing in today's world. Gain an understanding of the economics of the bar business. Explore distilleries. Contact the individuals who made it. Make as many connections as you possibly can. Do your schoolwork as though it were the most important thing in the world.

Believe what we say about this because it will make a significant impact on the outcome of your endeavour. We haven't come across a single prosperous distillery whose proprietor or distiller was just not totally enamoured with the whisky they were producing. Instead, I've come across a lot of unsuccessful distilleries whose proprietors or distillers entered the industry because they saw a business opportunity.

Additionally, it can be a lot of fun. A particularly encouraging aspect of the experience is when you are put in situations where you are surrounded by motivational people, and you learn about the background of a spirit that has been a participant of so many spectacular events throughout history. According to a number of others, it was at this time when their interest completely transformed into an obsession with the topic.

There are a large number of individuals that bring out items and claim that they are the first, the only, or "a unique blend," etc... Some people's email inbox is completely clogged with subject lines that are crammed with the word "first." The truth is that for 95% of the items that are now available, this is just not the case. It is quite unusual that you possess a truly original idea, and the only benefit you possess is to acknowledge this fact, observe what your ancestors did, and improve on that by accomplishing things in a new way while still maintaining the goal of making things better.

If you are unable to sit down and identify at least 100 rivals in the same spirit group as you, and if you do not have a decent sense regarding what they are about, who produces them, and how they're made, then you need to rethink your strategy and return to your research. If you don't really know the other people that are producing the same type of craft, how can you separate your item from theirs?

It is essential to have a solid knowledge of the wider background of a class as well as your position in respect to others. If nothing else, it is a thorough analysis of the competition. Still, it is possible that it will also educate you so that you will make the best selections POSSIBLY FOR YOU. In addition, you will learn how to improve to the various categories, such as Gin, Rum, or Whisky, instead of simply cluttering them with even more items that are identical to those already on the market.

Simply adding another item because there is room for it is not acceptable anymore. What needs do you satisfy that make it worthy of being placed on a shelf (whether it be at home, in a bar, or for a merchant) that has previously been curated to contain only ten options? What sets yours apart from those other exceptional options? Flavour and cost are simply two aspects of the solution; you won't be able to compete with the global corporations on price, and taste is a matter of personal preference; the question is, what are consumers purchasing that makes it desirable?

The Process of Obtaining a License in Order to Lawfully Distill Alcohol

It is essential to be aware that you will be required to pay tax on any alcohol that you create if you are a resident of Australia and wish to distil your own alcohol. Therefore, if a person wants to distil alcohol, they need to apply for a license much like they would if they wanted to drive a car. The Australian Tax Office is the entity that is responsible for issuing licences, and one can obtain one without paying any fees.

It is against the law for a person in Australia to use a still to produce spirits without first obtaining what is called an "excise manufacturing licence." This is the case regardless of whether the alcoholic beverage that is being manufactured is for "personal use" or for sale. If you distil alcohol without having the proper licence, you could face a fine of up to $85,000 and/or a possible prison sentence of up to two years, whichever comes first.

In contrast to the manufacturing of spirits, the making of beer, cider, or wine for one's own consumption doesn't really require licensing and is hence not considered to be unlawful. Brandy, rum, gin, and whisky are examples of spirits that have been distilled.

The tax that you spend on the distilled spirits that you make applies to the distillates that you have made for the exclusive purpose of consuming them in the confines of your own house. But, despite this, Australians are exempt from paying taxes on the beer, wine, and cider they manufacture and enjoy inside the confines of their own homes. This one-of-a-kind legislation was approved by the Australian government all the way back in 1901, and it has remained unchanged ever since it was first implemented.

The standards are very sound, and one could argue that the absence of changes reflects the fact that home stills are not all that common, which is another evidence that the restrictions are resilient and suitable. The tax is calculated based on each bottle that is purchased, and it is identical to the tax that is levied on homemade alcoholic beverages in every other respect. The excise rate goes up by the same amount every six months, and the current rate, as of December 2022, is $94.41.

When contemplating whether or not to submit an application for an "excise production licence," residents of Australia are strongly encouraged by the Australian Taxation Office (ATO) to consider a number of important aspects of their home. This involves taking into account the safety of your location and, in addition to that, determining whether the appropriate amount of excise duty would be paid at the appropriate time. Even if the alcohol is not sold, a tax known as "excise duty" must be paid on it because it was produced. In addition, if you are qualified, you may be able to receive a reimbursement for any amount of duty that you have already paid.

Suppose the excise manufacturing licence is not terminated before the following September 30, after the second anniversary of the day it was gained. In that case, it will be considered valid beginning on the day it was given and continuing until the following September 30 after the anniversary of the day it was procured. When a person's first excise manufacturing permit has run out of time, it is possible to extend it for a subsequent period of three years. The extended licence will run out of time on September 30 of the year in which it was originally slated to expire.

If a person does not already have the "excise manufacturing licence," they are required to obtain one from the ATO in order to fulfil the following requirements: fabricate a still, consider purchasing or sell a still, import a still, have ownership and possession or command of a still, and relocate or set up a still in their home or a commercial premise.

The request for a licence to own a still with a load of 5 litres or so can be received from the ATO and must be filled out in order to be considered for approval. If the person does not obtain permission to own the still from the ATO, they could face a fine of up to $8,500 if they do not do so. When purchasing a still that has a capacity of less than 5 litres, you do not require authorisation from the ATO.

Beginning on July 1, 2017, residents of Australia are eligible to receive a refund of sixty per cent of the excise duty that they have spent on the alcohol that they have distilled. The highest tax refund can be claimed by an individual in a given fiscal year is $30,000. The claim must be submitted one year after the excise duty has been paid.

People who want to sell the booze they have distilled, keep the liquor or manage their distillery are required to go through an additional process first. This procedure must be completed before they may do any of these things.

When distilling spirits, it is critical to observe safety precautions at all times, as well as to make certain that the appropriate apparatus and components are utilised in the process. Furthermore, it is of the utmost importance to only generate ethanol, which may be consumed without risk, in contrast to methanol, which is highly toxic and can even be fatal.

Ingestion of 10 millilitres of methanol can lead to blindness in humans while consuming 100 millilitres of the substance will almost certainly lead to death. In Tasmania in 2013, two men, ages 54 and 49, both passed away as a result of drinking homemade spirits. One of the men who was killed in this catastrophe was one of the individuals who had been distilling alcohol from potato peels for a number of years before the incident that ended his life. He had been doing so with a close circle of friends.

It is critical for people in Australia to get knowledge about the risks associated with the production of their own homemade alcoholic beverages.

What Still Do I Buy?

People are drawn to gorgeous amber stills, and this preoccupation frequently causes them to lose sight of the wider picture and of the solutions that are likely to be most effective for meeting their requirements.

Ask yourself what the most fundamental needs are that you have to begin with. Then, determine your first quantities by first determining how much you require in a year and how that translates into the number of batches you will need to produce. Next, consider the size of the distillery's footprint as well as the restrictions imposed by the building. This will better guide the initial decisions that are made concerning the size and shape.

Explain to yourself what steps you plan to take in order to increase productivity. There are a lot of people who start out with a tiny still and then work their way up to a larger one. However, when they do this, they take money that could be used to generate new sales and instead put it towards rebuilding infrastructure. 

This can also make it difficult to increase the ingredients in a recipe. To future-proof your business, you need to take into account not only the size of your distillery but also all of the variables that go into it, from the pipes and pluming to the recipe formulas to the bottling, packing, and shipping. This is in addition to the safety and health concerns and impact on the environment that arise when expanding a procedure that is either dangerous or wasteful.

It would be best if you allowed yourself some leeway regarding the things you can make with your still. For example, you may have a crystal clear concept in mind for your first offering, but what if you find that you'll have to perform a course correction and develop a distinct spirit or distil in a distinct manner in order to express other concepts?

Balancing the realities of your budget and conducting an accurate evaluation of your skill set are the final steps, and they are the most important ones. You might believe that the majority of your financial resources will be invested in stills because they are such a costly item; nevertheless, when viewed as a total cost in the whole plan of a distillery getting going, stills often only account for a quarter of your total expenditure. The cost of presenting your business to the industry, along with the cost of the infrastructure, the products, the components, and the bottles, can add up.

If you believe that someone other than you'll be the one doing the distilling, you should consider how your setting will be capable of enticing someone who is competent to do so. If you want to hire talented and competent people, a system must be hacked together at home.

Regardless of whether it does, it'd be a waste of money even under the assumption that it does because it would involve paying the salary of a highly trained individual while failing to provide them with the tools necessary to produce your spirit in a manner that is consistent, safe, and with efficiency improvements that will conserve money and allow the business to expand in line with supply.

As soon as you've finished giving these things some thought, it would be best if you began to look everywhere at different options to see what would work for you.

What Percentage of the Available Space Ought to Be Devoted to Product Storage?

Where is the Best Place to Store Completed Spirits?

When it comes to the industrial storage of booze, finished spirits can either be kept on-site at the manufacturing plant or in a bonded area that is located off-site from the station. Before being bottled and shipped out the door, spirits are typically left to rest in storage tanks or containers for a period of time before being bottled. 

Storage tanks are able to. Plastic totes should not be used for prolonged storage because their intended use is only temporary holding for movement purposes. However, they really aren't approved for the prolonged storage of high-proof spirits, and as a result, they do not comply with requirements despite the fact that they are simple and quick to use.

How is Inventory for Aging Differently from Inventory Ready to be Shipped?

The difficulties and requirements associated with storing items for ageing versus storing items for immediate sale are distinct from one another. 

If you are keeping stock for the purpose of sales, it is crucial to circulate your stock so that the pallet in the rear of your store does not collect "additional age" equivalent to several years' worth of time. When you are keeping your products so that they can age on purpose, you get a lot more considerations to make than when you are just transporting goods around.

If it even exists, most rickhouses are not equipped with foolproof climate control, and the climate inside will change throughout the year. You can achieve greater uniformity in the quality of your finished spirit by moving the containers that contain it within the rickhouse. 

It is highly likely that you will want to take samples from your barrels as they age; hence, it is usually a good idea to keep them in a location that is relatively simple to reach without needing to reorganise your whole storage unit. It would be impossible to cover every conceivable aspect of rickhouse and solera-style preservation in one essay because such topics might easily fill the pages of an entire book.

Increased Consciousness

We exist in an image-oriented era. Pictures representing your brand's identity are necessary for public relations, social media, sites, retail, event collateral, and marketing materials. So spend some time and money on getting some good photographs taken. 

Then, after six months, take yet more time to invest because you'll have refined your offering and made significant utilisation of the majority of the resources throughout the initial stage. This means that a refresh is not really good; it's vital to sustain the pace in order to keep moving forwards.

A solid website that supports e-commerce and maintains an active presence on various social media platforms is an excellent place to begin. A word of caution: social media profiles that are poorly managed are worse than having no accounts at all. You are not required to be everywhere simply because it is feasible to create a profile there, so before you spread yourself too thin, consider which platforms would complement both your persona and the way you speak.

Keep an eye out for events and consider how they might be used to your advantage to generate public relations opportunities and meet the content requirements of social media. Of course, plenty will give you permission to sell items during the occasion that will assist in covering the expenses. Still, you should keep track of the more important goal, which is to promote consciousness and get more publicity.