Cromwell's Scapegrace Distillery to grow with $2.9m Government loan

A distillery coming to the outskirts of Cromwell is flagged to become the country's largest, and a loan from the Government announced this morning will help the business get there.

Scapegrace Distillery, located on a block in Bendigo overlooking Lake Dunstan, is getting a $2.9 million convertible loan from the Government to meet growing national and international demand.

Regional Development Minister Kiri Allan made the announcement today, under the towering shadow of whisky barrels stored in a giant shed that's stage one of construction at the 36-hectare Central Otago site of the premium liquor company.

However the minister says building the regions is about giving people options in their own lives, and that's a motivator for her. She made a point of acknowledging the two workers in "high-vis" floating around at the back of this morning's presentation among a sea of suits.

"I guess a big part of why we want to invest in stuff like this is to make sure that we're creating awesome jobs.

"What we hope we are doing (with regional investment) is creating some pretty epic places for another generation of New Zealanders to love, flourish and give them opportunities to live in great places like this."

The investment is helping to provide economic stimulus after what's been "a few challenging years", she says.

Scapegrace Distillery co-founder and managing director Daniel McLaughlin says until now the business has grown off the back of private investment.

Now, the Government's backing will allow it to move to stage two of its planned development at the new Central Otago site - the building of the architecturally-designed distillery building.

There's three stills coming - two top-notch ones designed by a Scottish pro to be used to make whiskey, as well as a labour of love 1940s' rescue from Auckland's Lion Brewery for white spirits.

"We managed to save (it) from either the scrapyard or the museum...You'd never make anything like it again."

But don't let the vintage save fool you, or the backblocks location, Mr McLaughlin says he's building "a real world-class, Rolls-Royce type of distillery", ditching traditional fossil fuel power for an energy-efficient, industry-leading alternative in the process.

It's predicted to pump out one million bottles a year, and, based on sales to date, Mr McLaughlin says they'll sell as quickly as they come off the production line.

The Kiwi product is already on retail shelves in 35 overseas markets.

The world just can't get enough of new world whiskeys, he says, and then there's his company's RTD gins - one of the fastest-growing beverages of its kind on the local market.

Stage three, expected to be complete by March 2025, will see a "pop-up" visitor experience, before stage four, the cellar door, restaurant, and venue space is complete, which is flagged for October 2026.

When it's done, the distillery will be the biggest of its kind in the country, Mr McLaughlin says.

Scapegrace Distillery's loan comes from the Government's Regional Strategic Partnership Fund.

The $200 million fund helps to grow regional economies by working with them to develop region specific projects.