At some point up to now you've probably already given Gerry the skull some wine. If not, go to the mortuary and give him some now, then talk to him. He'll tell you to go dig up some cognac somewhere in between the Village and the Lighthouse.
The exact dig spot is a mound of soil with some white rocks almost directly north of where Dig sits, on the other side of the road. Unearth some interesting stuff, then go talk to Gerry again who suggests you buy some land as cover for using the machine. Go speak to Horadric to receive an outrageous price and some free advice.
Now run back and talk to Dig, then go back to Horadric again and pay him 30 silver for the land. Your achievement should unlock at this point.