Yes, I like this idea! Distillation of alcohol was available in medieval times (
history of distillation), so it might even be logical to split up alcohol production between breweries and distilleries. The kitchen could have an extra option next to 'cook' and 'brew': distill, available for certain plants and beverages.
The distilleries could then make brandy from wines (only elves distilling sunberry wines would be allowed to call it cognac) or whiskies from beer (as these are both malt/grain based), rum from sugars, wodka from tubers (these are potato like right?) and perhaps gin from berries directly.
This distillery should probably need fuel, which also gives us the opportunity to have magma distilleries (yay) and maybe they should be built using metal or glass.
As for racial preferences, I suppose anyone can distill anything as long as the ingredients are available, but there might be modifiers for quality, as dwarves will probably make superior single malt whisky, while humans might struggle to make a decent blend, even though their rum is exceptional. Elves drink nothing but champagne, goblins strike me as wodka-types, kobolds will try that as well, but end up with the stuff that makes you go blind.
Also, rice should be added (growing only in a plot submerged in 1/7 water perhaps) to allow for sake.
Having drinks age in casks would be a nice addition, although I can't imagine how that would be easily implemented..