E-Malt.com News article: Japan: Japanese whisky prices remain on a spirited upswing

Prices of Japanese whisky remain on a spirited upswing. As Japanese whisky has captivated the sophisticated taste buds of whisky lovers across the world with its high quality, exquisite craftsmanship and unique flavor profiles, some premium Japanese brands have seen their prices surge nearly 40% in the past five years, the Nikkei Asia reported on November 19.

With the speed of the expansion of supply limited by the aging process that whisky requires, the enduring Japanese whisky boom is driving prices higher.

According to data from Nikkei POS, which collects sales data from supermarkets and other retailers nationwide, the average retail price of whisky and brandy in stores was 1,624 yen ($10.80) in October, about 20% higher than in October 2018.

An analysis of purchase amounts and brands showed a noticeable increase in relatively expensive domestic whiskies.

Over the past five years, Suntory's top-of-the-line Hibiki Japanese Harmony blended whisky has become nearly 40% pricier, and a 700-milliliter bottle of Yamazaki single malt whisky has gained about 25% in price.

Prices of Nikka Whisky's higher-priced Yoichi and Miyagikyo, which also are single malt offerings, have surged as well.

Suntory raised the suggested retail price of Yamazaki by 7% starting with its April 2022 shipments due to higher costs caused by investment to ramp up production capacity, but the average market price has outstripped this.

The price tags have been pushed up by supply shortages amid the rising reputation and popularity of Japanese whisky in both the domestic and overseas markets. Distillers have been struggling to meet the growing demand for their popular labels.

During the 2000s and 2010s, Japanese whisky garnered a remarkable international reputation. Japanese brands have repeatedly won top honors in prestigious international competitions.

Leading the boom have been brands like Suntory's Hibiki and Yamazaki and Nikka's Taketsuru. A liquor store owner in Tokyo lamented, "It is still hard to stably source popular brands."

Trade statistics show that Japan's whisky exports reached 56 billion yen in 2022, a whopping 22-fold jump from 2012, and rose seven times in quantity, underscoring its popularity overseas.

The prolonged supply shortage has also impacted the "secondhand" whisky market. According to Masato Makida, an overall store manager at the secondhand store chain Liquor Off, which buys unopened bottles of liquor from people and then sells them at a discount, a coveted bottle of Yamazaki 12 Years Old single malt whisky now fetches around 18,000 yen. Even though Suntory's suggested retail price is 10,000 yen, excluding tax, "many foreign tourists visiting Japan snap it up without a moment of hesitation," said Makida.

A Suntory executive said the company is not comfortable about the fact that the product is sold at "prices significantly diverging from the suggested retail price." Since 2013, Suntory has invested 70 billion yen to expand distillation facilities to meet the increasing demand.

However, whisky requires an aging period and cannot be rushed to market, so it is not easily scalable as an industrial product. The domestic whisky market's slump until the mid-2000s led companies to limit supply back then. This is contributing to the current scarcity.

Price rises have spread beyond premium brands to many lower-priced ones as well. Suntory has raised the price of Kakubin starting with the July shipments, citing rising costs of raw materials, and Kakubin's market prices are hovering nearly 20% higher than in October 2018. Imported whiskies like Scotch have also become 10% to 20% more expensive due to rising costs of raw materials and transportation.

Domestically, the popularity of the highball cocktail -- basically whisky and soda -- continues to stoke whisky demand. According to Nikkei POS data on the sales of the popular distilled liquor shochu, the share of whisky and brandy has grown from just under 30% five years ago to nearly 40% now.

Some market watchers, like Liquor Off's Makida, point out that the demand for whisky has been shrinking slightly, due mainly to China's economic slowdown, but this has not yet been reflected in prices.


20 November, 2023