Tasmanian whisky has again been recognised with Hobart company, Lark Distillery, picking up a national business award.

The company was named Telstra's small business of the year at the annual event in Melbourne on Thursday night.

The boutique whisky producer opened in 1992 and now employs 18 people.

Tasmanian whisky is gaining a worldwide reputation for quality and a centre of excellence was established recently to encourage the industry's growth.

Founder Bill Lark said there was a co-operative approach among Tasmanian whisky producers.

He believed the award was recognition of the business working well with its competitors.

"When we started we got Tasmania's first licence to distil whisky in 153 years but on our own we thought that would be a bit silly," he said.

"We've gone out and actively supported the growth of the industry by helping other people that wanted to get involved; supporting them, sharing knowledge and working together.

"I'd like to think that that works and this gives it some recognition and congratulations to those other distilleries.

"To be chosen amongst all those terrific business to win an Australian award for business, it was huge accolade, quite a surprise and honour."

The company will share in $800,000 of prize money with two other winners.

It is the second year a Tasmanian business has been honoured, with Bruny Island Cheese winning the overall award last year.

This year's main award was taken out by a South Australian manufacturer REDARC which makes high-end components for several industries.