Arab spirits a western distillation, we're told (5)
I believe the answer is:
djinn
'arab spirits' is the definition.
(spirits in Arabian mythology)
'a western distillation we're told' is the wordplay.
'a western distillation' becomes 'gin' (alcoholic spirit).
'we're told' indicates a 'sounds like' (homophone) clue.
'gin' is a homophone of 'DJINN'.
(Other definitions for djinn that I've seen before include "Mythological spirit" , "Spirit of Arabian mythology" , "Spirit of Arabian legend" , "Spirits (in Muslim mythology)" .)