Wine fortification

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

On this page:

• Work out if excise duty or wine equalisation tax applies
• When you need a manufacturer licence
• Lodgment and payment obligations
• Concessional spirits used in wine fortification
• Is excise or WET payable?
• Record keeping

Find out about:

• Alcohol excise terms

Work out if excise duty or wine equalisation tax applies

To work out if excise duty or wine equalisation tax (WET) applies to an alcohol product, we consider the:

• type of product that's fortified
• type of spirit used to fortify it
• final alcoholic strength of the end product.

Beverages with an alcohol content of 1.15% or less are not subject to WET or excise duty.

Mixing alcoholic beverages to produce a new product

If you mix two or more alcoholic beverages to produce a new alcoholic beverage, the tax treatment will vary depending on both the ingredients and the alcoholic strength of the final product.

Generally, if you mix an excisable alcoholic beverage with another excisable alcoholic beverage, the final beverage is subject to excise duty.

However if you mix an excisable alcohol product (including excisable alcoholic beverages) with an alcoholic beverage wine equalisation tax applies to, you should contact us for assistance to determine the correct tax treatment.

Table 1 provides an indication of whether a fortified product is subject to WET or excise. However, we encourage you to contact us if you have questions about whether a fortified product is subject to WET or excise duty. We will be able to guide you based on the specific situation.

When you need a manufacturer licence

If the fortified product you intend to make is subject to excise duty, you must hold an excise manufacturer licence before you start manufacturing. A manufacturer licence allows you to manufacture and store excisable goods (in this case, the fortified product).

Next step:

• Apply for a licence to manufacture alcohol

Lodgment and payment obligations

If you are an excise manufacturer you must lodge an excise return to:

• report the quantity of product delivered into home consumption (into the marketplace)
• pay the appropriate rate of excise duty.

This is usually done on a weekly basis but if you're eligible for the small business entity concessions, you may be able to report and pay your excise obligations monthly.

Find out about:

• Lodging, paying and rates – excisable alcohol
• Settlement period

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 allows you to use the spirit for approved commercial purposes (in this case, fortification of Australian wine or Australian grape must). 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.

Next step:

• Apply for a permit to receive concessional spirits

Is excise or WET payable?

Note 1: ‘Alcohol from any other source’ means alcohol from any original source other than the 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.

Find out about:

• Records for wine fortification
• Lodging and paying – excisable alcohol
• Excise duty rates for alcohol
• Excise on alcohol

See also:

• WETR 2009/1 Wine equalisation tax: the operation of the wine equalisation tax system
• WETR 2009/2 Wine equalisation tax: operation of the producer rebate for other than New Zealand participants