Question Author
This law has its roots back in 1736 when the Gin Act came into force.
In 1730 there were over 7000 'dram shops' in London alone and by 1750 it was estimated that 20% of all houses sold gin !! Beer could only be sold in inns but gin could be sold anywhere. All that was required was a notice of the intention to become a distiller to be displayed in a public place for 10 days.
Not suprisingly , everyone was a little hammered.
The government ie Customs & Excise could not gauge the volume of alcohol/gin in the system and determined that separating the two was needed. This allowed the Revenue to keep a track of all alcohol movements and not lose out on duties , where payable. If we were allowed to produce alcohol ourselves ,as well as gin, it would be easy to make a few 'overnight' batches that Customs would be none the wiser about.
All remaining 5 English Gin distillers + the 3 in Scotland have to buy in alcohol and keep exact records of the gin produced from this alcohol , which are seen on demand by HMRC. All our production is 'under bond' with no excise duty paid ; however we must advise HMRC of all movements in/out of our premises , even blending movements between different tanks within our blending hall.