By the mid-19th century, the wine industry was well established in Australia. However, it faced many challenges. Most Australians of Anglo-Irish descent drank beer or spirits rather than wine, while, out of snobbery, those who did drink wine preferred imported brands. Colonial producers lobbied for changes to licensing laws to establish a colonial wine licence, allowing them to sell their products through their own outlets and specialised wine shops. A letter to the Sydney Morning Herald in 1850 lamented:

It remains then with our law makers to say whether this shall become a great wine country, or whether we shall continue dependent on the nations of Europe for an article which this country can raise on its own soil in the greatest perfection. I am fully sensible that at the present time this is not believed, and that there is a great, but unjust prejudice against colonial wines. 

In 1862, the New South Wales Government passed an Act establishing the colonial wine licence. The Act permitted shopkeepers owning or renting premises valued at £10 annually to sell colonial wine, city and perry, six days a week between 6.00 am and 10.00 pm. The beverages had to be made “from fruit grown in the Colony”. This meant strictly in New South Wales, as Victoria, Tasmania, South Australia and Western Australia were regarded as separate colonies and customs duty applied to goods transferred across borders. In 1863, Western Australia passed a similar Act.

In 1864, Victoria passed its own Act, the Wines, Beer and Spirit Sale Act 1864, which created nine different licence types, including a colonial wine licence. That licence in Victoria differed from those in the other colonies. Whereas the Acts in NSW and WA prohibited the consumption of wine, cider or perry on the premises where it was sold, the Victorian legislation required that they be consumed on site and could not be taken away. This led to the establishment of Victoria’s first wine bars (known generally as wine saloons).

Not everyone was happy about the colonial wine licences. In New South Wales, the police declared that:

‘the wine-shops, as licensed under the Act referred to, are injurious and demoralizing to the community, as they are usually established in isolated positions where there can be little or no supervision. They become the resort of bad characters, and places for the illicit sale of spirits, – the fruitful source of intemperance and crime’. 

After Federation, in 1901, the provision requiring wine to be made from fruit grown within a specific state was challenged by retailers. In 1909, a dispute regarding wines from elsewhere in Australia led to a court case in Western Australia. The case eventually went to the High Court, which ruled that any law that discriminated against goods from interstate was unconstitutional, as it breached free trade provisions. The colonial wine licences were renamed Australian wine licences and eventually phased out as liquor laws were updated.