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How to licence a micro-distillery in South Africa

The below article was supplied courtesy of Ward Brink Consulting (Pty) Ltd to assist individuals who wish to know more about how to licence a micro-distillery in South Africa.

Licencing of micro-distilleries

To operate a micro-distillery where you manufacture liquor at or below the threshold volume prescribed by legislation, and sell it for retail purposes, a micro-manufacturing liquor licence must be obtained from the Provincial Liquor Authority.

A micro-manufacturer may not exceed the following threshold volumes:
➢ For manufacturers of beer, 100 million litres per year
➢ For manufacturers of Traditional African Beer, 50 million litres per year
➢ For manufacturers of wine, 4 million litres per year; and
➢ For manufacturers of spirits and/or any other liquor, 2 million litres per year.

A micro-manufacturer produces and bottles liquor for sale directly to the public and to another manufacturer or distributor. Liquor so manufactured or bottled may also be sold to a retailer if and to the extent permitted by the conditions of the licence. Micro-manufacturing is normally treated as an off-consumption licence, but there is an option to include on-consumption under certain circumstances.

An applicant for a micro-manufacturing liquor licence may be a natural or juristic person such as a company, close corporation, or trust. The applicant will need to ensure that the premises are zoned for business use appropriate for the running of a micro-distillery and that any building plans or renovations, should such be required, are approved by the local government. You don’t have to wait for the building works to be completed and may submit your application before you commence with the construction work.

From an equipment perspective, it is important that the correct manufacturing equipment is obtained and that such meet the requirements of applicable health and environmental specifications. Should your micro-distillery wish to cater for visitors, you will also need to look at aspects such as business licensing, sufficient parking and health and safety compliance in respect of your potential patrons.

Your identified location is also important for your licence application. Your distillery should be at least 500 metres away from places of worship, educational institutions, schools and/or other similar facilities. As the public interest is taken into consideration by the liquor authority when considering licence applications, quite often licence applications are challenged by neighbours or members of the public objecting to the issuing thereof. Factors such as contributing to tourism, creating employment, trading hours etc. can be factors that weigh in favour of an application.

Every application goes through a rigorous process before it can be approved by the liquor authority. Should you wish to start a micro-distillery, it will be important that you understand the various steps and the information that needs to be correctly submitted with your application to position your application for positive consideration. Any non-compliance with the legal requirements will diminish your chances of successfully obtaining your licence and quash your dreams of opening your own micro-distillery. We therefore recommend consulting with a liquor licence consultant to assist in the steps and information needed for submitting a compliant application for a micro-manufacturing licence.

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