Gin Distilleries in Australia
There’s no denying it – the Australian Gin scene has up and come and brought with it dozens, if not hundreds, of excellent spirits. We’ve been delving into it with several pieces of insight in the last couple of weeks, beginning here with an oversight. Now, we speak to several of the leading figures within the Australian Gin industry to find out about the challenges and peculiarities of setting up down under and the general lay of the land, from a more practical perspective.
Getting started – Permits, Scale and Timelines:
As in England, it’s a long and involved process getting all of the bureaucracy out of the way before one can get a distillery up and running (legally, anyway). That said, the proliferation of new producers has made this easier as they have precedents to work off. Councils know what they’re looking for in terms of paperwork and distillers know who to talk to when it comes to box ticking.
Four Pillars Co-Founder and Master Distiller Cameron Mackenzie says, that the path is mainly paved for new producers, though adds that it’s still a time consuming process. “In Australia, most would allow around 18 months to set up. It really depends on the availability of services to the site. Gaining the permits from the ATO appears to be a little smoother than when we started. In all honesty I’d say local government is probably the biggest challenge. Trying to get planning permits can be a real problem.”
Let’s bear in mind for a second that the 18-month waiting time is just for permissions and once you are really going ahead with plans for what happens inside the walls. The wider funding, learning and building process is a much more involved affair. Renowned Australian Gin blogger Caroline Childerley, who usually resides behind The Gin Queen pseudonym, says that getting the license is the relatively easy bit: “A lot of work goes into waste management planning, energy sourcing and car park spacing.”
It seems that scaling is something of a global problem, so it’s hitting our Aussie cousins just as hard as us. Once you’ve created that tongue tingling, sense waking, transporting, magical, wonderful gin on your tiny little test still, you’ve got another job on your hand: either replicating it on a grander scale or making enough of it to be commercially viable.
It’s something that all wannabe distillers need to consider from the very early stages of the process and often, many simply look at the scale and infrastructure required to be a small operation. Too few simply don’t look towards future proofing or how to upscale when the time comes, and it’s something that we’ve seen as a particularly big issue for many of the Australian producers that we’ve spoken to over the past two years. Inoka Ho, Sydney Cocktail Club founder, explains: “The ability to achieve the economies of scale required to compete with bigger (and often international) producers needs to be considered straight away. Unless this is built into the distillery’s business model for the longer term, craft distilling in Australia runs the risk of being merely a ‘hobby’ industry.”
Australian Gin Botanicals:
Botanicals are quite often where it all begins. No one gets into gin making for the sheer fun of scrapping with local government, they do it because they want to create something fresh, beautiful and brilliant. We’ve seen the influx of local ‘star’ botanicals in England over the past few years, but Australia is some next level shit. Take a little look at our Australian Botanicals article HERE, but if you haven’t the time we’ll summarise: Australian botanicals are as weird as the names they sport – be you tasting pig face, lilli pilli or quandog and you’ll love it!
When you think about the amount of insects, snakes and other insane things waiting to kill you around every corner in Australia, it suddenly becomes quite obvious that this is a unique chunk of land, and one that has spawned many a thing – animal or mineral – that we just don’t have in Europe. This makes the idea of “native” botanicals incredibly exciting, but it raises new issues too.
Gin is gin for a reason, juniper is the crux of it all, but there are the other big hitters, like coriander, angelica, orange etc. that form part of that familiarity. Tommy Haughton and his company Beacon Commodities, who are one of the biggest wholesale supplier of gin ingredients across the whole of the UK, says that getting people to understand the importance of ‘Gin Trade Juniper’ in Australia can be something of a challenge. “We have seen some of the juniper on offer in Australia which is geared towards the food trade and poor compared to what we can offer from the UK.”
Sure, he’s a salesman, but Haughton is also a man who absolutely knows what he’s talking about on this topic. At times, products get held up in customs. Always, they have to endure a shipping period of around 39 – 41 days. It’s a hell of a process to get the right ingredients in the right place, but Australian distillers do all they can to ensure that their gin is of the highest possible quality, time and cost needs to be factored into the process.
Back to the Australian botanicals we go! When we get a bottle of Australian gin through the post, we tend to open it with an anticipatory wince. Some brilliant gins have come out of the country – we’re Four Pillars’ number one super fans, after all – but some not so brilliant spirits have flown forth too. We’ve seen some really quite strange, often one-dimensional gins head up from down under, all lemon myrtle and river mint with barely a drop of juniper in sight. People want to flaunt their locality, but are they doing so at the expense of the Gin category? Ho seems to agree with us that’s it’s hit and miss as you explore the category.
“Many native botanicals call for serious balancing skills,” she explains. “But I fear some producers are seeing it merely as a point of different in an increasingly saturated category without really understanding what and how it contributes to the creation of a cohesive flavour profile that also heroes the key ingredient in gin – juniper.”
With such loud, bold flavours growing through the rocks and sand and deserts of Australia, a struggle is inevitable: how to appeal to the local crowd without alienating an international audience. Childerley agrees: “I think we’ve barely scratched the surface in terms of native botanicals that are being discovered that can be used. I think there is a struggle between making something ‘different’ enough to stand out, and making it appeal to bartenders and global markets. Some gins that are too heavy on natives don’t mix that well in cocktails.”
Gin is Heavily Taxed in Australia
The tax structure in Australia is simply not geared towards supporting the craft distilling industry. In fact, it would probably be fair to argue that it’s set against it. A bottle of gin that retails at $70 AUD will see a profit of around $10 – $12 after the taxman has taken his $30 share (carved up between duty and the local equivalent of VAT – GST). It’s something you here a lot of noise about out there, almost constantly. We’d like to just quickly raise our heads above the parapet and say that for those not seeking the super-premium prices, UK distillers pay a similarly egregious amount of tax on each bottle of gin (granted it’s less than down under) before the distributors and retailers apply their margins, and do it with a great deal less complaint… We’re just saying.
As we’ve understood it, Wine is the reason Australia has a two different alcohol taxation systems and the disparity between how they are treated compared to the distilling industry is a huge part of the debate that’s creating tension. Everything wine related is taxed under the Wine Equalisation System, which adds 29% of the wholesale price of wine. In Australia this means that the cheaper your wine, the less tax you’re going to pay. This wasn’t difficult maths for vintners to work out: if you buy a $7 bottle of wine you’re going to pay around $2 in tax. If you buy a $135 bottle, you’re going to pay around $40.
As outside observers, what seems to then have happened was that Low-end became the new vogue, so the government had to work out a way to get wine makers back on board with top shelf stuff. This came in the form of kickbacks – under WET, a $500,000 rebate can be claimed by wine producers each year. While the tax system for spirits works differently to wine, it stings just as hard for those in the craft arena and distillers can only claim back as much as $70,000,
This is already changing, however, with the recent Budget pushing this figure up to $100k. A good first step, undoubtedly, but it’s still, as Childerley puts it, “a drop in the ocean compared to the WET rebate.”
The Government has craned its neck a little to the left and right of late and is, it seems, starting to see the potential that the craft distilling industry offers. “We are making progress, but it isn’t fast enough given the growth in the industry,” Mackenzie said. “The recently announced rebate will come into effect but the reality is that we have two or three legislated tax increases before that happens. If anything, the rebate goes a long way into recognising that we are in industry worth some attention.”
Support and Education
All the world’s a stage, and there’s a hell of a lot going on behind the scenes to make this funny little theatre play out. Drinkers seldom see the effort that goes into supporting and structuring the booze industry and for every one success story there’s usually a whole raft of factors that conspired to help it happen.
Whether its roots work from the ground up or a sharing of experience from the top down, the UK and US distilling scenes took a whole lot of moulding, mending and shaping to become the big, brilliant and inclusive societies that they are today.
That’s not just in terms of “trade craft” either. With the Australian craft distilling scene still in its infancy, there’s a long, long way to go before drinkers are as clued up as they need to be. Why do you need a knowledgeable audience base, you ask? Well, there are a few reasons. The first is a pretty basic question of economics. If a supermarket gin is $50, say, and a craft gin $80, why – if you know little about the spirit other than how it makes you feel – would you opt for the pricier option? A clued up, in the know drinker is going to act as an ambassador not just for your brand but also for the category as a whole. They’ll spread the love far and wide, making that artisanal offering all the most lauded. Drink less but drink better is a mantra that’s been core to craft for years because of this.
Of course, consumer education has to come from distillers themselves, and they too are only learning their trade. While people like Mackenzie and Bill Lark of Lark Distillery are widely credited and admired for sharing their wealth of knowledge with their peers, that is still a pretty short haul for such a big space. Especially when you consider that there were decades between Lark setting up and craft distilling taking off across the country. In terms of the modern game – we’re in a post craft distilling boom that’s now whipped around the world and evolved – there needs to be many others who help as both of them do. After all, they are not there as educators, they are simply people who are nice enough to have the patience to answer a few questions now and again, as they have distilleries to run!
Gin being so very new in Australia means that there is an infinitesimal foundation to build off and this will take time to nurture. Unfortunately, it seems as if there isn’t that much of a desire within the Gin industry to really double down on building and supporting infrastructure that will nurture it long term. “Whisky distillers seem to be keener to invest time in acquiring the IBD certification, often supported with courses run by the Tasmanian Whisky Academy, but Gin… not so much,” says Childerley.
Mackenzie is a little more optimistic, though as one of the figureheads of the Gin category in that region, he has little choice. “It [education] is still lacking in Australia, but we are now building a good knowledge bank of local distillers who seem happy to share their experience,” he said. “We’ve always tried to be transparent and help people wanting to enter the industry. My theory is that most of the time I will give you the questions rather than the answers. Things like power supply, water supply and effluent disposal are high on my list. If someone wants to set up a distillery and their first question is about lemon myrtle my eyes glaze over. There is so much more to it!” We agree and hope more continue to take his approach.
So, there you have it, it’s an interesting market and a country that’s fast developing a name for itself in gin circles. We’ve tried to cover from a few different angles too, so take a look at the related articles to see different insight about it and let us know on Twitter if you think we’ve missed anything out!
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