Founder David Vitale taking whisky lovers through his Melbourne distillery.

Global spirits business Diageo has invested in an Australian whisky distillery.

Distill Ventures, Diageo’s accelerator fund, has taken an undisclosed minority stake in Melbourne-based New World Whisky Distillery, which produces Starward whisky. The investment is part of a broader $10 million round by Starward this year.

Diageo’s investment will be used to ramp up production with an eye on export markets in southeast Asia and the US.

Diageo Australia, which owns leading category brands such as Johnnie Walker, Smirnoff and Bundaberg Rum, recently posted its third successive profit drop, despite an increased market share, due to tight margins in the supermarket-dominated retailing space.

David Gates, Diageo’s global head of premium core spirits, said constant innovation in the whisky category is keeping the market vibrant and Australian whiskies are gaining increasing global recognition.

“Starward has created a truly distinctive whisky with exceptional quality at younger ages from their innovative wood policy and getting positive impact on maturation from Melbourne’s constantly changing climate,” he said.

Starward’s new wine cask single malt whisky.

Diageo launched Distill Ventures two years ago. Starward is the second whisky brand the business has invested in.

New World Whisky Distillery is based at a former Qantas maintenance hangar at Essendon Fields in Melbourne and launched in 2009.

It currently produces single malt in both apera (Australian sherry) cask and red wine casks, alongside a limited-release series under the Starward brand.

Founder David Vitale said his team were thrilled by Diageo’s backing.

“This tops off an incredible year for us, with the successful launch of our Wine Cask edition, and now an investment from a partner who fully supports our vision of making a modern Australian whisky and taking that across Australia and to new markets overseas,” he said.

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