Whisky firm mulls over site for $1.7m distillery

The New Zealand Malt Whisky Company has struck a deal with Woolworths in Australia. Photo / Supplied

The New Zealand Malt Whisky Company expects to decide by the end of the year where to build a $1.7 million distillery - either in Dunedin or Oamaru.

At present Oamaru-based, the company has just signed distribution deals with Woolworths in Australia, and separately with New Zealand duty free outlet JR's, to stock its range of mainly single malt whiskies, one of which officially becomes 25 years old this year.

Tasmanian-based businessman Greg Ramsay, who led an international syndicate of nine investors to purchase the whisky-barrel assets from receivership in October 2010, said aside from land costs, construction of a whisky distillery had been priced at $1.7 million.

"The focus for 2012 is production. Preferably we'd like to go into a character building; Dunedin has so many beautiful old buildings," he said during a visit this week.

Of the original 450 barrels purchased, about 225 were barrels of single malt about 18 to 24 years old, which had been branded Lammerlaw, and the other 225 barrels were the former Wilsons brand, which were at least 12 years old.

Ramsay said about 20 per cent of the original stock had been bottled, with about 360 barrels still left.

"We need to think about production coming in as stocks wind down," he said.

Ideally, barley and malt ingredients would be sourced from around the South Island, Ramsay said.

He said the deal with Woolworths in Australia, which operates four separate liquor chain stores, was likely to account for half of the remaining stock in sales in the next four to six years.

He understood that for every A$1 spent on off-premise liquor purchases in Australia, Woolworths had the equivalent of a 38c (or 38 per cent) market share. Australians were paying A$89 ($116) for a bottle of Dunedin DoubleWood, with the New Zealand whisky becoming popular with expatriates in Queensland, Sydney and Perth. In New Zealand the DoubleWood price was $79.

The single malts include Milford, 1987, (cask strength) 1988 and South Island Single Malt, and blends the Water of Leith and Dunedin DoubleWood.

Ramsay said the United Kingdom's second largest distributor, Gordon & MacPhail, was interested in stocking its New Zealand-origin whisky, which in general had been boosted by the brand of New Zealand moving up the global rankings, from seventh to fourth recently and now ahead of Australia.

Retail sales and tastings have been established in a seven-day cellar door outlet in the Loan & Mercantile in Oamaru's historic precinct and a part-time outlet in Dunedin's railway station, timed for cruise ship visits.

The syndicate paid an undisclosed sum for the whisky assets of a company which had been placed in receivership in February 2010 by South Canterbury Finance, owing an estimated $3 million.

- OTAGO DAILY TIMES