Licence approved

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Licence approved

Postby DamnDecentDave » Tue Mar 20, 2018 1:37 pm

I've successfully applied for a licence to manufacture alcohol and am posting this to share the experience. My intention is to operate a small micro distillery (gin) and cellar door and this information relates to that eventual outcome.

For those maybe not aware, in Australia you cannot manufacture alcohol legally without a licence. No if's, but's or maybe's! You can own a still and you can use it to distill say essential oils or the like but you cannot use it to manufacture alcohol without a licence. Also, you must have Australian Taxation Office (ATO) permission to have possession of any still over five litres in capacity, regardless of what it's used for.

When I first considered making spirits I found that there was very little information readily available to help frame an application for a licence. Hopefully this post will provide some useful directions for someone else contemplating a licence. It's not difficult, however does take some time and effort.

The licence is granted by the ATO (free) who assign a case officer who handles the application from start to finish. It's important that there is good rapport with this case officer whom I found to be very helpful. In my instance all correspondence but for my first verbal inquiry, was by email and it took a couple of months to achieve a result. Were I doing it again it'd likely take a few weeks, such is the knowledge that I now have but didn't have before.

The ATO website has a lot of linked information regarding the manufacture of alcohol and a good place to start is with the Application form NAT 5906. Do have an ABN set up (free) prior which does help to ensure that the application is not held up. In my case the ABN was set up for a sole trader. I would strongly recommend a business plan is developed and that it is framed to cover the following minimums:
Business goals and objectives – effort, timing
Organisational structures & resources – staffing
Business operations – products,distribution, pricing, payments, production, assets, people, risks etc
Market analysis & strategy – competition, SWOT, promotional
Financials
I probably spent a week developing my business plan which I submitted as an initial part of the application process and it was well received by the ATO I think because it addressed/answered a lot of their requirements up front. Some of the stuff that I hadn't covered (this held things up) and that required me to further research answers were:
Detail of Manufacturing Process – input ingredients, botanicals infusion, cuts determination
Obscuration handling – eg: a laboratory still, IR technology
Site plan – production, storage, cellar door
Security – theft is a concern
Prior experience – anything at all that relates and I believe there are also training courses.
Equipment – existing and planned
Records keeping – excel, MYOB etc
Insurance – to cover stored alcohol theft
Disposal of off-spec alcohol – requires ATO permission else excise is due

Excise is paid on all manufactured alcohol and is attracted as soon as the alcohol leaves the bonded area. In my case the bonded area is the production facility with integrated cellar door, so excise is not due until a customer leaves with product. If however I take some bottles to a fair then I pay excise whether I subsequently sell them at the fair or not. Similarly I pay excise on stolen alcohol product. I elected to declare and pay the excise on a monthly basis and I have to report even if I have a NIL return. The excise reporting is simple and I do it via the ATO business portal.

Getting a licence was the first step for me in this venture and I didn't have specifics regarding equipment procurement or specific manufacturing processes and techniques. I certainly wasn't about to order equipment or build infrastructure not knowing whether or not my application for a licence was going to be knocked back. I had no way of knowing the likelihood of success. Looking back over the application process I have to say that whilst there are a lot of questions of necessity asked by the ATO they are all answerable, and an applicant should feel confident of a successful outcome. Preparation and research are all that is required. I felt that the ATO was on my side and responsive to any queries I had. At the end of the day, they want the excise revenue.

Anyway, licence in hand now we move to Step 2 - council development approval .... !
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Re: Licence approved

Postby bluc » Tue Mar 20, 2018 1:46 pm

Interesting and congrats :clap:
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Re: Licence approved

Postby woodduck » Tue Mar 20, 2018 3:12 pm

Good read thanks Dave, some very handy info there.
Good luck with the rest of the process and I look forward to seeing your end product out there in the future :handgestures-thumbupleft:
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Re: Licence approved

Postby The Stig » Tue Mar 20, 2018 5:32 pm

So where are you setting up shop ?
What’s the name of your distillery going to be?
Last edited by The Stig on Tue Mar 20, 2018 5:59 pm, edited 1 time in total.
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Re: Licence approved

Postby Doubleuj » Tue Mar 20, 2018 8:02 pm

The Stig wrote:So where are you setting up shop ?
What’s the name of your distillery going to be?

:text-+1:
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Re: Licence approved

Postby db1979 » Tue Mar 20, 2018 8:27 pm

Well done, keep us posted :handgestures-thumbupleft:
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Re: Licence approved

Postby mattyb » Tue Mar 20, 2018 9:10 pm

Great to hear.It would be great if you keep us posted hear. I think the hard part comes now with council. We are in a similar boat getting council approval for a gate to plate business with our Lamb. I hope your experience is as positive as ours in your dealings with them as I hear there are a lot of non helpful councils out there.
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Re: Licence approved

Postby Buzz » Wed Mar 21, 2018 7:26 am

Great info Dave :handgestures-thumbupleft:

What do you plan to produce, Gin, Vodka etc.. or aged spirits?
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Re: Licence approved

Postby ThePaterPiper » Wed Mar 21, 2018 1:29 pm

Great write up DDD! You are a gentleman. That is the wonderful thing about this forum. Gents are willing to give freely of their hard and arduously earned knowledge. My glengarry is off to you!
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Re: Licence approved

Postby DamnDecentDave » Wed Mar 21, 2018 2:35 pm

Thanks for the feedback guys. Appreciate you support and I'll keep posting as things progress. Don't want to let the cat out of the bag wrt name/location until council have said yea or nay to the spot where I want to set up. Fingers crossed .....
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Re: Licence approved

Postby bonifazius » Wed Mar 21, 2018 2:51 pm

Congrats :handgestures-thumbupleft:
Will be watching with interest!
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Re: Licence approved

Postby Manchestershine » Thu Mar 22, 2018 9:20 pm

DDD, well done on getting the license, it is an achievement. All the best with council, the ATO is as you say pretty straight forward council is anything but. I really wish you well with your micro distillery and hope it's every bit the success your planning for.

Can you imagine if the same process was required for brewing beer? People would laugh at the suggestion.

Government in this country hates small business, anyone who sticks their head up and gives it a go gets smashed with red tape, fines and taxes. Fancy having to pay tax on stolen product? If one theft isn't enough the ATO comes in and steals some more. All taxation is theft.

Has anyone on the Aussidistiller site ever tried lobbying government for changes?
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Re: Licence approved

Postby warramungas » Sat Mar 24, 2018 10:20 am

Manchestershine wrote:
Has anyone on the Aussidistiller site ever tried lobbying government for changes?


:))
Been done to death bud.
Last edited by warramungas on Sat Mar 24, 2018 10:21 am, edited 1 time in total.
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Re: Licence approved

Postby Manchestershine » Sat Mar 24, 2018 2:00 pm

warramungas wrote:
Manchestershine wrote:
Has anyone on the Aussidistiller site ever tried lobbying government for changes?


:))
Been done to death bud.


Perhaps a bit more detail would help, did you contact the Minister directly? What was your angle? Every State Government has a small business policy committee did they have input into your lobbying? Did you buy any tables at the target politicians annual lunch? How much money have you spent on donations to election campaigns?
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Re: Licence approved

Postby bluc » Sat Mar 24, 2018 2:39 pm

I havn't heard of anyone doing it to this extent not like it is in america where they have a permanent group of people continually lobbying..
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Re: Licence approved

Postby Manchestershine » Sat Mar 24, 2018 3:52 pm

bluc wrote:I havn't heard of anyone doing it to this extent not like it is in america where they have a permanent group of people continually lobbying..


Bluc, I've got news for you it's not just America. Go for a drive around Canberra note the names on the buildings eg. Why would Boeing have a multi storey building in Canberra when they don't build anything in Canberra? There are countless companies and lobbyist working all day everyday to have the concerns of their industries heard.
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Re: Licence approved

Postby bluc » Sat Mar 24, 2018 4:57 pm

Maybe you misunderstood my reply.

In australia I havnt heard of any pro hobby distilling group lobbying government continusly like the group that does in America.
I am well aware of groups lobying government and making "contributions" to political parties to get their causes through to polticians and parliment..
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Re: Licence approved

Postby Sam. » Sat Mar 24, 2018 6:14 pm

Mancherstershine you are saying what a lot of people have said before you and got nowhere.

Maybe with this site you might want to consider becoming a site donor and posting your feelings in a more appropriate setting?
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Re: Licence approved

Postby wynnum1 » Sun Mar 25, 2018 8:09 am

Manchestershine wrote:DDD, well done on getting the license, it is an achievement. All the best with council, the ATO is as you say pretty straight forward council is anything but. I really wish you well with your micro distillery and hope it's every bit the success your planning for.

Can you imagine if the same process was required for brewing beer? People would laugh at the suggestion.

Government in this country hates small business, anyone who sticks their head up and gives it a go gets smashed with red tape, fines and taxes. Fancy having to pay tax on stolen product? If one theft isn't enough the ATO comes in and steals some more. All taxation is theft.

Has anyone on the Aussidistiller site ever tried lobbying government for changes?

Lots of the red tape is created by industry to keep out competition know someone who was in the waste vegetable oil industry and made the comment that now we are established will make it hard for any new startups .
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Re: Licence approved

Postby Minpac » Sun Mar 25, 2018 8:26 am

Congratulations and thanks for the info. It's something I'm hoping to do in the next couple years.

Can you tell me what setup you've put forward to the ATO on obscuration and ABV measurement?

thanks,

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