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Unlicensed manufacture of excisable alcohol

When you need an excise manufacture licence and to pay excise duty, and how to contact us with concerns.

Last updated 8 June 2023

What you need to know

Sometimes businesses or individuals illegally manufacture, produce or sell excisable alcohol without:

We treat these activities very seriously. See How we respond to illicit alcohol.

Media: Distil the facts about alcohol (Duration: 00:30)

When you need an excise licence

You need an excise manufacturer licence to manufacture or produce excisable alcohol in Australia. You must meet the legal obligations attached to your licence, and pay excise duty where applicable.

The only exception is brewing or fermenting certain alcoholic beverages for personal consumption. See When you don't need an excise licence.

To manufacture, produce or sell excisable alcohol, you may also need to check the requirements of other state and local organisations, including:

  • state liquor licensing organisations
  • health agencies
  • local government.

Distilling alcohol

To distil spirits, you need an excise manufacturer licence from us. If you are licensed, you don't need to apply for separate permission for your still.

We do not grant licences to distil spirits for personal consumption. There must be a commercial purpose involved.

Severe penalties apply if you distil alcohol without a licence.

You don't need a licence or permission for stills that are 5 litres or less that are not used to distil alcohol.

Start of example

Example: low-priced stock manufactured without an excise licence

Jay is a person who distils spirit without an excise manufacturer licence. He bottles the spirit and labels it to give the appearance of a legitimate product, using:

  • manufacturer details on the label that are fictitious and not his own
  • a barcode that belongs to an entity that is not the manufacturer specified.

Jay does not report or pay any excise duty on the product.

Jay then sells the spirit to a wholesale distributor, Wholesale Liquor, for a price significantly lower than when the excise duty component (and GST) would be included in the selling price.

The excise duty payable on a 700 ml bottle of spirit with an alcoholic content of 37% alcohol by volume is about $25.00 per bottle (see Note 1).

The product should have a retail price of greater than $25.00, taking into account the other costs, taxes and overheads to manufacture and sell a bottle of the spirit.

Wholesale Liquor does not hold an excise storage licence. They are only able to purchase from its suppliers and store alcohol that has already been properly entered into the Australian market.

Wholesale Liquor on-sells the illicit alcohol to a retail outlet. The price is still less than, or similar to, the excise duty component (and GST) that should be included in the selling price.

The retailer then sells the illicit spirits to consumers.

This is an offence under the Excise Act 1901 committed by each entity in the supply chain, including the:

  • person who manufactured the product without an excise licence
  • wholesale distributor
  • retailer.

Various offences and consequences could apply in this situation.

Penalties may include having to pay up to 5 times the amount of duty that would have been payable or criminal prosecution.

Note 1: this is an estimation only. Use our Excise duty rates for alcohol to work out specifically for each type of spirit.

End of example

When you don't need an excise licence

The only alcoholic products you can make without an excise manufacturer licence are:

  • products that wine equalisation tax applies to
  • beer and other fermented beverages that are made for non-commercial purposes using non-commercial facilities and equipment. This does not apply to spirits or products that contain spirits.

Common examples of alcoholic products you can make without a licence are:

  • home-brewed beer
  • fermented cider and wine.

How to contact us about excise

Contact us early if you think you may have made a mistake, or you have questions about when you need:

  • an excise licence
  • to pay excise duty.

We will work with you to help you understand and meet any applicable excise obligations.

To reduce penalties that may apply, you can make a voluntary disclosure.

For more information, see Excise on alcohol.