How do I get a License for a Craft Distillery in South Africa?

How do I get a License for a Craft Distillery in South Africa?

Published : 23-01-2020 - Categories : Commercial Distilling , Craft Spirits , Legislation

   

Getting a License for a Craft Distillery in South Africa is not easy, it is not fun, and it is not quick … but it can be done.

The aim of this article is to give you an indication of the steps that need to be followed, the different organizations you will be dealing with, and everything else you need to do in order to get your license(s).

But please note the following.

   

DISCLAIMER

The License Application Process differs from Province to Province, and Municipality to Municipality. The fact of the matter is that we are dealing with National, Provincial and Municipal Legislation here, as well as with Human Beings, and individual interpretations, processes and procedures differ.

As we all know, just because something SHOULD happen a certain way, does not mean it always happens that way. This article is written in accordance with how WE interpret the Law and the Procedures and should in no way be construed as being set in stone or guaranteed.

Distillique always has an always will advocate the use of REPUTABLE Liquor Lawyers and / or Liquor Agents in assisting you to get your license. Although theoretically this is something you could try and do yourself, the chances of you succeeding the first time, and not wasting time or money, is very slim.

This article is considered to be accurate at the time of writing – Laws and Procedures do change over time, so contact us, or your Liquor Lawyer / Agent, to be sure that you have up to date information.

    

Where can I set up a Craft Distillery?

As much as we would want too, we cannot put up a Craft Distillery wherever we want.

In most Provinces you are limited to either Light Industrial or Agricultural Zoning. In KZN though (and I think – but please confirm this – the Free State) we can also use Mixed Core Use Zoning. Now please note – Agricultural Zoning is Agriculture, not Agricultural Residential or Agricultural Holding. It should normally be 5 hectares or more. In most cases it should also be Agriculture II and not Agriculture I. Agriculture II allows for Cultivation and Processing, while Agriculture I only allows for Cultivation.

The Zoning alone is however not sufficient. You also need to look at the Business Rights of the Property.

If you are using an Agriculture Zoned Property, you need to ensure that you also have Commercial Business rights, as the standard Agricultural rights will allow you to obtain a Manufacturing License, but you will need Commercial Rights for your Distribution, On-Con, Off-Con and Tasting Room Licenses.

If you are using a Light Industrial Property, you need to ensure you also have Manufacturing Business rights, or you will not be able to obtain a Micro Manufacturing License.

You therefore need to go to the local City Planner or Town Planner, and obtain a Zoning Certificate, as well as a Letter of Permission from the local Municipality that they give you permission to open a Micro Liquor Manufacturing Facility for Spirits.

You will need to do this before engaging any Liquor Representative or do anything else, as nothing can proceed without the premises. 

Once the premises is identified, you can start engaging your Liquor Representative.

    

How do I choose a Liquor Lawyer or Liquor Agent?

Liquor License Applications are specialized processes, where it is more important to know the right people and the intricacies of the application process at the particular offices, than knowing the theoretical way the process should run. You therefore need to choose a LOCAL representative.

As a rule – out of personal experience – Liquor Lawyers tend to be more successful and better at the application process than Liquor Agents, especially if something about the application is a little unique or different. However, many of our clients have had success using Liquor Agents. 

Either or, a proven track record of obtaining a Micro Liquor Manufacturing License is essential. It is one thing to obtain a license for a Bar, Restaurant or Liquor Store, but quite different to obtain a Manufacturing License. So, ask for references, and speak to the references.

Liquor Law is also a specialized field, so do not assume that your normal Lawyer will be able to successfully complete this application for you.

   

What Licenses do I need to Apply for?

Many individuals approach us an ask – “How do I get a Craft Distillery License?” or “How do I get a Distillery License?”

Firstly, there is no such thing as a Craft Distillery License.

Secondly, you should NEVER use the word “Distillery” when dealing with the Provincial Liquor Board or Municipality, as in their vocabulary a “Distillery” is a Heavy Industrial Facility – a Noxious Industry.

We utilise a Micro Liquor Manufacturing License.

Now, the Micro Liquor Manufacturing License allows you to Manufacture Alcohol, but it does not allow you to sell Alcohol.

To sell Alcohol you need a Provincial Distribution License. This will allow you to sell and deliver products to Retailers, Wholesalers and other Distributors. Not too the Public.

To sell Bottles directly to the Public, you need an Off-Con License (Off Premises Consumption License).

To sell Drinks, Cocktails, etc. you need an On-Con License (On Premises Consumption License). 

To do Tastings, you need a Tasting Room License (although paid Tastings can also be done under the On-Con License.

In some Provinces, North West for instance, some of these activities are already including in the standard Micro Liquor Manufacturing License, but in most Provinces, they are separate applications.

South Africa does not have a set License for Online Sales, and to be honest, there has not yet been a definitive Legal Position on what License or Combination of Licenses is required for those activities. 

The safest course of action seems to be that you should have an Off-Con License (to cover the sale to the Public) and a Distribution License to cover the shipment. To cover shipment across Provincial Boundaries however, this will need to be a National Distribution License and not a Provincial Distribution License. See below for more details.

    

What do I need to provide my Liquor Representative?

Although your Liquor Agent or Liquor Attorney will guide the process and make sure everything is submitted and in the right fashion, they are not going to do everything for you – a lot will still be left in your hands.

The minimum information you would need to provide them is listed below. This should by no means be construed to be a complete list, and some items are not required in all Provinces. Again, the process differs from Province to Province.

The following documentation & information is required:

  1. A Zoning Certificate form your local Municipality confirming that the land use right is suitable for the required liquor license.
  2. A Local Authority Approval (Letter of Permission) from the Town or City Planner, in addition to the Zoning Certificate, clearly stating their permission to apply for the type of license application on the proposed premise.
  3. A SAPS Clearance Certificate of the applicant/s. If the applicant is a CC of PTY Ltd, then a Clearance Certificate for each member or director. NOTE: THE PRINTING OF THE POLICE CLEARANCE CERTIFICATE CAN TAKE BETWEEN FOUR TO SIX WEEKS.
  4. A copy of the Identity Document of the Applicant. If the applicant is a CC of PTY Ltd, then an Identity Document of each member or director.
  5. A floor plan of the premises drawn to scale, indicating all dimensions, smoking or non-smoking areas, doors, windows and equipment layout, as well as Fire Escape Routes, Fire Equipment, etc. In most Metropols, these plans need to be approved or stamped by EMS (Emergency Management Services first).
  6. Two sets of colour photographs of each section of the premises, inside and outside, as well as the parking area. If you intend to have a Tasting or Event Space as well, include photographs of Restrooms too.
  7. An original tax clearance certificate from SARS not older than six months, from the Company if in the name of a CC or PTY Ltd, alternatively from each member or director.
  8. A Title Deed, Lease Contract or proof that the applicant may occupy the premises if the License is granted.
  9. A letter from the Municipality’s Fire Department confirming the suitability of the premises.
  10. A letter from the Municipality’s Health Department confirming the suitability of the premises.
  11. A letter from the Municipality’s Building Inspector confirming the suitability of the premises.
  12. A letter from the Local Police Inspector confirming the suitability of the premises
  13. If the applicant is a CC or PTY, a copy of the Certificate of Incorporation which indicates all the directors or Founding Statement confirming all the members.
  14. The cell number, email address & fax number for the Contact Person responsible for the application.
  15. The Residential address of the applicant, director and members (if applicable).
  16. The Postal address of the applicant, director and members (if applicable).
  17. The Work History of the applicant, director and members (if applicable).
  18. The Full address of the Business Premises which includes the Building Name, Shop Number, Street Address & Erf Number.
  19. Trading name of the business.
  20. The name of your municipality such as Sebideng, West Rand, Johannesburg, Tshwane, Ekurhuleni or Metsweding.
  21. List of Schools within 500m and 1000m from the proposed business.
  22. List of Churches within 500m and 1000m of the proposed business.
  23. List of similar businesses within 500m. These should be specified according to the different Licenses you are applying for.
  24. Public transport within 500m of the proposed business.
  25. A full description of the intended nature and proposed activities of the business.
  26. What other interest the applicant, directors or members has in the Liquor Trade in South Africa (individually and/or jointly).
  27. A Department of Agriculture report on the testing of a sample product that it is fit for human consumption. See our Article on DAFF for more information.
  28. Proof of Advertisements placed in the Local Newspaper(s) to inform the public of your application.
  29. Proof of Advertisements placed in the Government Gazette to inform the public of your application.
  30. Proof of Advertisements placed on the Premises (Posters or Notices) to inform the public of your application.
  31. Proof that you informed local Residents and other Businesses of your application and intended activities (not always required, but advisable).
  32. Proof of Delivery Vehicle Branding, or intended Delivery Vehicle Branding (design) for the Distribution License Application.
  33. All information and proof of information requested within the Application Document. This includes, but is not limited to, your Waste Management Plan, Social Responsibility Plan, BEE Plan (if applicable), Range of Products and Production Quantities, Job Creation (Direct or Indirect), Anticipated Impact on the Local Liquor Market, etc. etc.

   

Where do I obtain a National Distribution License?

The National Distribution License is not issued by the Provincial Liquor Board, but by the National Liquor Authority (NLA) who forms part of the DTI (Department of Trade and Industry).

It is an online application, requiring the same information provided to the Provincial Liquor Board.

It will also require a separate and more in-depth Inspection by a local Police Officer who will act as a representative of the NLA, if not inspected by an NLA inspector (offices are in Pretoria, so Gauteng inspections are often carried out by the NLA directly).

   

Why do I need a National Distribution License?

As mentioned before – the National Distribution License covers Courier Shipments across Provincial Boundaries for Online Orders, as well as your own deliveries. 

For instance – if you are located in Magaliesburg (North West Province) and you want to deliver to a Liquor Store in Krugersdorp (Gauteng), you cannot do so under your Provincial Distribution License. 

Although the two towns are only 26 km apart, you cross a Provincial Boundary, and therefore your delivery is illegal.

    

This covers the basics of what you need to know to get your licenses, but it is not the end of the Process. Please refer to the follow-up articles on SARS Registration and DAFF interaction for a more complete picture.

Or, to make it a whole lot easier, attend our B1 – Craft Distilling Business Course for in depth discussions, as well as Q&A sessions, on these processes.

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