• Wine fortification

    Wine fortification is the process of adding spirit to wine or grape must. You can add the spirit during or after wine fermentation.

    The type of product that is fortified, the spirit used to fortify it, and the final alcoholic strength of the end product are used to work out whether wine equalisation tax (WET) or excise applies. Beverages with an alcohol content of 1.15% or less are not subject to WET or excise.

    To work out if the fortified product is subject to WET or excise, see Table 1.

    If the fortified product you will be making is subject to excise, you must hold an excise manufacturer licence before you start fortifying. A manufacturer licence allows you to manufacture and store excisable goods (in this case, the fortified product).

    If you are an excise manufacturer you must report the quantity of product being delivered into home consumption (into the marketplace) on an excise return. You must use this form to pay the appropriate rate of excise, usually on a weekly basis.

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    Concessional spirits used in wine fortification

    If you want to use spirits to fortify Australian wine or Australian grape must, you can apply for a concessional spirits permit. A permit enables you to use the spirit for approved commercial purposes (in this case fortification of Australian wine). Concessional spirits are free of excise duty. You will need a permit whether you produce the spirits yourself or obtain them from a licensed supplier.

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    Is excise or WET payable?

    Table 1: The excise treatment of fortified wine

    Product

    Alcoholic strength less than 8%

    Alcoholic strength 8–22% inclusive

    Alcoholic strength more than 22%

    Grape wine fortified with grape spirit and/or brandy

    WET

    WET

    Excise duty

    Grape wine products fortified with grape spirit and containing at least 70% grape wine

    Excise duty

    WET

    Excise duty

    Fruit or vegetable wine fortified with alcohol from any other source –grape spirit or neutral spirit (see note 1)

    Excise duty

    WET (The fruit or vegetable wine must be at least 8% strength before the fortification)

    Excise duty

    Mead fortified with grape spirit or neutral spirit

    Excise duty

    WET

    Excise duty

    Cider and perry fortified with alcohol from any other source (see note 1)

    Excise duty

    Excise duty

    Excise duty

    Sake fortified with any spirit

    Excise duty

    Excise duty

    Excise duty

    Note 1: ‘Alcohol from any other source’ means alcohol from any original source other than fruit or vegetables (for fruit or vegetable wine) or apples or pears (for cider or perry).

    Record keeping

    You must record and keep details of all fortifying spirits you have received, stored and used. You must keep these records for at least five years and make them available to us if requested.

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    Storing fortifying spirits

    You must store spirits in vessels with accurate measurements and record the quantities you store.

    Your equipment must be appropriate for the size of your operations and the amount of spirit you will hold. For example, if you are a small fortifier, you may receive and store spirits in 200-litre drums.

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    Accounting for fortifying spirits

    You must record:

    • date of fortification
    • fortification reference
    • details of the wine or grape product fermented, including  
      • litres fermented
      • baume (sugar content) of unfermented juice
      • baume of fermented wine
      • alcoholic strength of wine
    • details of spirits used, including  
      • litres used
      • alcohol strength
      • litres of alcohol (LALs) used
    • details of fortified wine, including  
      • litres of fortified wine produced
      • baume of fortified wine
      • alcoholic strength of fortified wine.

    You need to be able to reconcile the fortifying spirit used in attachment 1 (above) with attachment 4 (below).You must contact us to tell us about any:

    • significant spillage
    • theft of spirits from your premises or in transit from your supplier
    • excessive losses.

    If you can't account for spirits to our satisfaction, you may have to pay an amount equal to the excise duty you would have been liable to pay if the spirits had not been given concessional (excise-free) treatment. This applies regardless of whether you have a concessional spirits permit or an excise licence.

    We'll tell you in writing if we make a decision that you need to pay an amount equal to the excise duty and we'll also advise you of your review rights at the same time.

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      Last modified: 11 Oct 2017QC 19102