When a bottle of Karuizawa 52-year-old Zodiac Rat sold for a whopping £363,000 (about ¥47 million) at auction in London to an Asian private collector on March 18 — a record for a Japanese whisky — the eye-watering price capped a long-building trend: Japan’s take on the liquor is serious business.
Although yet to match its Scottish counterparts — a bottle of Macallan sold for $1.9 million (about ¥204 million) late last year — the upward trend has been clear for some time and, bolstered by the drink’s scarcity, looks set to continue for the foreseeable future.
“Japanese whisky offers three important things for collectors: rarity, quality and beauty,” says Jonny Fowle, spirits specialist at the auction house Sotheby’s, noting that “the bottle design and packaging of Japanese whisky make it perfect for a collector to proudly host (it) on their shelves before the time comes to sell or drink.”
It is that first point — rarity — in conjunction with the global appreciation of Japanese whisky, a relatively recent development, that has been the main driver behind the rise in prices. Low production volumes years ago have led to a dearth of age-statement whiskies in the present, while the now-revered distilleries Hanyu and Karuizawa have long since shut down — the latter’s buildings were even demolished in 2016. Today, there are only a handful of distilleries across the country, the vast majority owned either by Suntory or Asahi.
Although domestic whisky production has ramped up since 2012, the timescales involved mean there is not enough aged product to meet drinkers and collectors’ thirst.
A rare recent example of an age-statement whisky, the Yamazaki 55, went on sale earlier this year for a cool ¥3 million per bottle before tax, with only 100 made available.
“Age-statement (whisky) is not being released into the market, and that’s what’s pushing up the price,” says Daniel Lam, director of wine and spirits for Asia at Bonhams in Hong Kong. “For example, a Yamazaki 18 now, compared to last year, the price has gone up by 20 percent and roughly we would say that’s about $7,000 (about ¥755,000) a bottle now in Japan, compared to the normal retail price in 2012 of about $100.”
On the other side of the economic equation is demand, which has shot up just as availability of age-statement whisky has slumped.
“For the vast majority of its history, Japanese whisky was largely ignored by the outside world,” explains Brian Ashcraft, author of “Japanese Whisky: The Ultimate Guide to the World’s Most Desirable Spirit.”
“In the past few years, people have felt like they have just discovered Japanese whisky. There has been a lot of buzz about (it),” he says. “This, in turn, drives the prices up. Plus, there are new foreign markets for the stuff.”
The rising prices naturally invite nefarious activities, with people trying to pass something off as a whisky that it isn’t — two men were arrested in 2018 in Mie Prefecture for selling counterfeit 30-year-old Hibiki.
“Once a bottle fetches $100,000 (about ¥10.7 million), then people will start doing something dodgy,” says Lam. “We come across many bottles that have an authenticity issue. We do have a very good archive based on the bottle shape, the capsule and the label and the quality of the paper, all this kind of archive in Bonhams, so we can mostly tell the differences.”
The exorbitant prices that bottles are fetching naturally invites the question of who is forking out such vast sums of money for them.
As the Zodiac Rat auction winner suggests, many are based in Asia. “(The region’s) most enthusiastic bidders are private collectors,” notes Fowle. Perhaps unsurprisingly, buyers from mainland China lead the way in terms of lot value, according to Lam, although Thailand is a notable presence in that regard too, while Hong Kong and Taiwan stand out in terms of quantity.
“In the beginning, 2012, the auction market was targeting a group more like a mature demographic over 40,” says Lam. “We’ve seen a gradual increase in younger collectors — I would say compared to the contemporary art category, many of them, private buyers, are in their 20s or in their 30s. We’ve seen this group of people coming up, appearing very rapidly.”
Further supporting the auction prices is the relative ease of whisky collecting. Compared with something like wine, the conditions of storage aren’t nearly as strict — no elaborate wine cellars are needed — and the drink can be kept on the shelf for much longer.
“I think that makes this category more accessible in terms of collecting,” says Lam.
Given the ongoing supply issues, the sky-high prices look unassailable, at least for the time being. Perhaps a more immediate threat is the coronavirus and the massive global recession it is almost certainly set to bring in its wake. But even that might not be enough to bring prices back down to earth — Lam notes that one of the highest bidders at an auction in February was Chinese, right at the time the crisis was most intense in that country. Further underlining Japanese whisky’s resilience, on May 16, the Ghost Series whisky collection, also from Karuizawa Distillery, sold at Bonhams for 967,200 Hong Kong dollars (¥13.36 million).
“The whisky and wine markets are still strong, as evidenced by the record we set very recently for the highest value ever achieved for a bottle of Japanese whisky,” says Fowle. “While there is uncertainty across the globe, the fine wine and spirits markets are continuing to perform well.”