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KristenGardener_07I have started in this oil business as a complete outsider, knowing nothing (still knowing very little). No pun intended, with just an idea and a hunch, and have had a few surprises along the way. I am writing this as nothing more than my own observations.

I am very lucky to live in a town with a local university, including a plant sciences department that has the ability for a stranger to walk in off the street and present a specimen and ask, ‘can you check this out? I think it is interesting and would love to know what it is’.They consequently did check it out, and yes it was very interesting. After a number of samples, with the feedback all being very encouraging, I came to the conclusion that maybe we needed to scale it up and see if there was a commercial viability with this new oil.

Word seemed to flow very quickly, a number of different characters presenting with some pretty wild proposals. After a great deal of thought I decided to take the plunge and commission a still of my own to make the larger scale production possible as the demand seemed to far exceeded the university facilities. Since then I have formed a relationship with a local distributor, and set the ball in motion, with a still manufacturer who has been in production for quite some time.
All of this coincided with the coronavirus perfectly. All of a sudden there was no work coming in, financial commitments and a giant pit of dread in my stomach. I was sitting down one evening and decided to check out the viability of making ethanol in the soon to be delivered still, knowing nothing I had asked around and along the way someone had mentioned that it was all done through the ATO.

Looking up the ATO website was a shock to the system. There in black and white was the following statement:

Application for permission – Still
Complete this application if you don’t have an excise manufacturer licence and want permission to manufacture, sell, dispose of, buy, import, own or possess a still with a capacity of more than five litres. You need permission for the still regardless of what it will be used for.
A still is equipment used to separate substances from a liquid mix, by using the different evaporation rates of those substances. The capacity of the still refers to the volume of liquid that the still is capable of holding.
Permission for the still is not a licence to distil alcohol. It is illegal to distil alcohol without an excise manufacturer licence.
https://www.ato.gov.au/Forms/Application-for-permission—still/

At no point had anybody ever mentioned this little tit-bit! To make matters more complicated, the manufacturer must be an ATO approved manufacturer of stills complying with all of their requirements.
I immediately contacted the manufacturer, and they admitted that they had never heard of this at all ever, and they certainly did not have permission to build stills. I let my soon to be distributor know of this requirement, and asked if they were aware of this, which was met with a no, and if that is the case we cannot legally buy your product off you if you do not possess this paperwork… I submitted the form, filled in as much info as possible and waited.

KristenGardener_09A few days later, I received this reply:

Hello Kristen,
Thank you for your application for a still permission dated <text removed for privacy reasons>.
In order for us to properly assess your application we require the following information:

  1. Please describe what end products will be produced with the <text removed for privacy reasons> litre in capacity still?
  2. What raw materials will be used in the manufacture of each finished product?
  3. What volume of <text removed for privacy reasons> oil do you propose to produce per month?
  4. Will the still be used for the manufacture of an excisable product being alcohol or any plans for this sort of manufacturing to be conducted in the future?
  5. Who will be the owner of the still?
  6. Your local council may require you to hold a permission to operate a still from a property. Have you approached your local council in regards to operating the still from <text removed for privacy reasons>?
  7. As we require the seller of the still to hold permission from the ATO to sell a still. Has this permission been sighted or provided to you?

We may not issue permission for you to acquire this still if no permission has been granted to the seller.
Furthermore, please provide further information if the end products produced with this still will be sold to market:

  1. Provide the ABN under which these business activities will commence under?
  2. What business activities have occurred under this ABN in the past?
  3. What will the trading name be?
  4. Who is involved in this business? 
  5. Is this business involved in or have associations which are involved in the manufacture or sale of alcoholic beverages?
  6. Is there a current website active or plans for a website to be set up in the promotion or sale of the end products?

We may require further information in relation to the answers you may give in order for us to make a decision.
Note: Please ensure all you tax obligations are up to date. This includes both personal income tax returns and business tax obligations.
We may delay you application if any of these obligations remain outstanding.
You are requested to respond to this email by close of business dated <text removed for privacy reasons>.
Regards”

KristenGardener_10I replied as best as I could informally outlying my plans for the still, the reply the next day was as good as it gets:

“Thank you for your email providing us with further information in support of your still permission application.
We have approved permission for you to buy, own and possess a <text removed for privacy reasons> litre in capacity still.
The approval is attached to this email.
Please read this document as it contains information in regards to still ownership, information on still offences and what we require you to do further.
Please note: The granting of a still permission does not give permission for the distillation of alcohol to occur or for any research and development activities being conducted without the appropriate licence to manufacture being granted, as issued by the ATO. No guarantee is given that a licence to manufacture will be granted to you or any entity when such permission is granted. Penalties apply.
You must not use this still to research or develop any alcohol or alcohol related products until a licence to manufacture is granted. Penalties apply.
We recommend that you contact your local council, landlord (if applicable) and other tenants within your complex before you decide to operate a still from your premise.
We have also attempted to contact the manufacturer of the still in regards to his obligation to obtain permission from the ATO.
In regards to manufacturing hand sanitisers I have provided the following link to the ATO website which should answer most of your questions.
https://www.ato.gov.au/Business/Excise-and-excise-equivalent-goods/Alcohol-excise/”.

I now have permission to possess a still, as far as I am aware no one locally is even aware of this requirement. I am led to believe that there are quite a few still owners out there who probably do not possess this permission. I am writing this in the hope to be of assistance, so we can all share our knowledge and not come undone through bureaucracy and ignorance in a landscape of law that changes without notice to participants.
NICNAS is a whole different subject that to the newbie off the street is totally overwhelming. Maybe I will go into greater detail later after I can get my head around how they operate.

– Kris Gardner

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