Along with Scotch, American, and Irish whiskey, Japanese whisky is among the world’s most renowned varieties. You might have observed, though, that the average bottle costs a little more than the others. What gives? The purpose of this guide is to attempt to address the following question: Why is Japanese whisky so expensive?
Here Is Some Background
Knowing your past is essential for comprehending the present and future. Either that’s incredibly reasonable reasoning or it’s the excuse you get from someone who wasted a ton of money on two degrees in history they never used.
Yamazaki Distillery first opened its doors to the public in 1923, marking the beginning of commercial whisky production in Japan. From the late 1930s until the early 1980s, the category expanded continuously, with Nikka following in 1934.
But by the time MTV, NES, and ET were in their heyday, Japanese whisky was no longer chic. Shochu, a light spirit made from rice, was king when whiskey was unpopular and distilleries were forced to shut down or drastically cut their yearly production. Nikka, who owned the Miyagikyo and Yoichi distilleries, even went to extreme lengths, like temporarily ceasing production for a few years. There was a time when Japanese whisky wasn’t as highly esteemed as it is today.
Despite widespread distaste for whisky during the Dark Ages, that didn’t imply Japan’s exports were of low quality. The world finally started to notice the exquisite flavor of Japanese whisky in the 2000s, after a cult following formed among individuals who were able to obtain the premium variety in the 1990s.
Japanese whisky shot to fame around the new millennium, thanks in large part to award shows. The tide had shifted by the time Yamazaki Sherry Cask 2013 took home the Best Whisky Award after brands like Hibiki 30 Year Old and Yamazaki 12 Year Old had more medals than Horatio Nelson’s favorite blazer.
You may recall that several distilleries went out of business or reduced their whisky production in the late 1980s due to the economic downturn, but with the accolades came demand. It would be impossible to produce some of the most sought-after whiskies, like Karuizawa, in the future. The distillery buildings were eventually torn down in 2016 after closing in 2000 owing to financial troubles.
Distilleries were unable to produce age-statement products as a result of this problem’s exponential growth. Beam Suntory stated in May 2018 that they would be discontinuing the sale of Hibiki 17 Year Old and Hakushu 12 Year Old. “Staying in business is challenging due to the current imbalance between supply and demand,” a representative said. When supplies decrease, not only does demand increase, but prices do as well.
At the very top of the market, the bidding process became chaotic, and the average bottle’s price rose gradually. After receiving a total of £1.8 million in November 2023, Sotheby’s shattered the record for the most valuable collection of Japanese whisky ever sold at auction. At the auction, the most expensive bottle sold for £300,000. It was the Karuizawa 52-Year-Old Cask #5627 1960. Let’s have a quick look into why prices for Japanese whiskey have skyrocketed.
Yamazaki Mizunara Cask
Yamazaki’s Mizunara Cask expressions have witnessed a remarkable surge in pricing. Collectors and enthusiasts have developed a strong desire for bottles aged in Japanese oak casks because of their distinctive flavor profile. The limited availability of Mizunara oak barrels and the unique aging process have contributed to the remarkable price appreciation of these releases.
Hanyu Ichiro’s Card Series
The Hanyu Ichiro’s Card Series, featuring playing card-themed labels, has become iconic in the world of Japanese whisky. These rare releases from the now-closed Hanyu distillery have fetched astonishing prices at auctions. The Hanyu Ichiro’s Full Card Series, comprising 54 bottles, has been known to command millions of dollars, solidifying its status as a collector’s dream.
Limited Edition Releases from New Distilleries
New Japanese distilleries are making waves in the whisky scene with their limited edition releases. Distilleries like Chichibu and Chita have gained recognition for their craftsmanship, and their early expressions have soared in value. Collectors are eager to acquire these bottles, anticipating that they will become future classics.
Rare Independent Bottlings
Independent bottlers of Japanese whisky have contributed to the surge in prices by offering unique and rare releases. Bottlers like The Scotch Malt Whisky Society (SMWS) have introduced collectors to single-cask, cask-strength Japanese whiskies that are highly sought after. These bottlings often feature distinctive flavor profiles, driving up their market value.
Silent Stills and Lost Distilleries
Whiskies from silent distilleries and lost distilleries in Japan have become prized possessions among collectors. Distilleries like Kawasaki, Karuizawa, and Hanyu, which are no longer in operation, have seen their releases appreciate significantly. Bottles from these distilleries have become symbols of Japanese whisky history and are valued for their scarcity.
Should You Invest in Japanese Whiskey Despite the Prices?
| Advantages of Investing | Why You Should Invest |
|---|---|
| Rising Global Demand | Japanese whiskey continues to experience growing popularity worldwide, increasing the demand for both aged and limited-edition bottles. As an investor, you can capitalize on this trend by acquiring sought-after bottles that are likely to appreciate over time. |
| Rarity and Scarcity | The limited availability of Japanese whiskey due to distillery closures and discontinued releases, it a finite commodity. Investing in rare expressions or bottles from closed distilleries can lead to substantial returns as collectors seek these elusive treasures. |
| Award-Winning Reputation | Japanese whiskey’s consistent recognition and awards on the global stage enhance its prestige. Owning award-winning bottles from reputable distilleries can solidify their value, especially if they have received accolades from prestigious competitions. |
| Growing Collector’s Market | The Japanese whiskey collector’s market is thriving, with enthusiasts actively seeking unique and well-preserved bottles. Investing in carefully curated collections or individual bottles can yield significant returns as the market expands. |
| Whiskey Tourism and Distilleries | The rise of whiskey tourism in Japan has increased interest in the country’s distilleries. Visiting these distilleries not only offers a firsthand understanding of the craftsmanship but also the opportunity to purchase exclusive releases that can be appreciated. |
| Portfolio Diversification | Japanese whiskey can serve as a unique addition to your investment portfolio, diversifying your holdings beyond traditional assets like stocks and bonds. Its non-correlated nature can act as a hedge against market volatility. |
| Historically Proven Investment | Japanese whiskey has a track record of delivering favorable returns for investors. Bottles from distilleries like Karuizawa have demonstrated exceptional value appreciation, setting a precedent for future investments. |
Ultimately, you get to decide. Whisky connoisseurs and drinkers from all over the world continue to flock to Japanese whiskies. Given the recent increase in production, the tide will gradually turn back a bit. All around Japan, distilleries are popping up, with one fresh spin on Karuizawa among them. However, the impact on pricing will not be noticeable for some time.
In a nutshell, the scarcity and intense demand for Japanese whisky drive up its price. Should I do it? That is subjective and based on your definition of Japanese whisky.