Alcohol has a lower boiling point than water but that does not mean that when you heat a mixture of alcohol and water that all the alcohol boils off first. The mixture will ‘boil’ in such a way that the vapor will have a higher alcohol content and the remaining liquid will have a higher water content.
The liquid and vapor are then separated. The vapor with the higher alcohol content can be cooled and condensed back into a liquid. Voila, you now have a stronger drink!
The process can be repeated creating mixtures that are higher and higher in alcohol content. But alcohol/water mixture does have a limit. At 95%, the liquid and vapor have the same concentration upon heating so distilling cannot *completely* separate water from alcohol.
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