Bonded Distillery @museum.de

F: At this stop, we'd like to show you a bonded distillery. People often think the term refers to a special distillation process. Or even a special type of distillation designed to produce very high proof alcohol. However…

M: That is simply not the case. Although almost all cereal spirits are produced in bonded distilleries, the term has nothing whatsoever to do with the production process.

F: So what happens in a bonded distillery?

M: Quite simple. As the term suggests, it's a sealed distillery. The entire production process takes place under customs seal.

F: That means that only the customs office has a key to the distillation facility. What's more, all the flanges and connections are sealed. The German state has a spirits monopoly, which it invokes, and which makes the production of alcohol subject to tax.

M: In a bonded distillery, the tax on spirits, or liquor tax, is determined based on the alcohol actually produced. For that purpose, a special instrument is installed on the outflow, which measures the amount of alcohol produced. The tax is then calculated per litre.

F: There are also licensed distilleries that generally specialise in distilling fruit. They aren't bonded under customs legislation, but they may not produce more than a maximum of 300 litres of pure alcohol annually. But there's a twist: M: In this case the tax isn't calculated based on the amount of alcohol produced, but on the amount of mash processed! Experienced distillers manage to produce a surplus. In other words, they get a lot out of their mash. And that surplus is ... tax-free. Well then, we'll drink to that!