Legal Notes of Home Distilling

I had said before that distilling alcohol is illegal here in the United States because of safety reasons due to fusel alcohols. However, on my recent trip to Pacific Distillery, they believe it is illegal to distill without a license has to do with taxation. They said that tax on beer and wine is low at $0.05 for a 12 oz beer can, $0.21 for a 750 mL wine bottle, but hard alcohol is charged $2.14 for 750 mL of 80 proof spirit.  I calculated that tax per serving, so it is still $0.05 for beer, about $0.04 for a serving of wine, and $0.13 per serving of hard alcohol. So in the government’s mind, the tax revenue lost to homebrewers is small, but the tax revenue lost to home distillers would be massive.

However, in New Zealand, spirit sales were down, and due to some loopholes in the law, the cost of enforcing distillation laws were becoming too costly, so in 1996, New Zealand made home distillation legal. What happened? Pacific Distillery said spirit sales soared (I have been unable to confirm this), and tax revenue went up. Speculation is that people began buying more out of stores to taste test against their own products, just like how there are probably more breweries in areas where there are more homebrewers: people want to see what other people do. I actually expect something like this phenomenon to happen with the increase of home cheese making to drive sales up in craft cheeses.

Further reading:

• Legal Considerations for Home Distillation
• Legal
• TTB
• Liquor Centre Group (the number of outlet growth was highest 1996-1997)
• New Zealand Consumer Price Index
• New Zealand – Beers of Our Lives
• Facts about Alcohol