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Japanese whisky: Is the shortage of aged labels really a cause for concern?

With rising demand and dwindling stocks, Japanese whisky is hitting peak prices — here's where to place your bets.

“Acquiring Japanese whisky requires a lot of patience, resources and most of all – luck,” notes Loh Chin Hui, an avid collector who showcases his latest buys under the moniker, Whisky Uncle.

Anyone who has faced empty shelves at Haneda or Narita airports’ duty-free shops or scoured stores in Tokyo for signs of Hibiki 17 Year Old or Hakushu 12 Year Old will know what he means.

The interest in Japanese whisky has grown exponentially and it’s getting harder for consumers to get their hands on them. Mr Loh says that he’s often had to enlist the help of friends and contacts living in Japan or the UK for even the slightest chance of bringing them home.

Why Japanese whisky?

Scotch whisky may be the real McCoy but it has since been relinquishing much of the limelight to the likes of Yamazaki, Suntory and Nikka, just to name a few.

“They are incredibly consistent and of great quality,” explains Mr Loh. “Some of their best are right up there with what Scotch can offer.”

“Being on the sweet, mellow end of the spectrum is key to its rise,” says Timothy Ng, founder of Spirit & Penance, a distributor of Australian whiskies and spirits in Singapore. “The flavours are easily accepted even by people who are not yet inducted into the world of whisky.”

(RELATED: Flavoured, low-alcohol Scotch? Distilleries test whisky’s limits)

“The Japanese are also very proud of their natural water – for good reason. Couple that with the four season climate for maturation and you’ll get a different interaction with oak barrels (as compared to Scotland),” adds Vincent Hong, managing director of Barworks Wine & Spirits Pte Ltd.

(RELATED: Why a few drops of water make whisky taste better)

Before the shortage

What’s surprising is how recently the world developed a raging thirst for Japanese whisky – four years to be exact.

“Jim Murray (the English whisky critic) announced the Yamazaki Single Malt Sherry Cask 2013 as Whisky of the Year for 2015, giving it 97.5 points out of 100. It attracted huge publicity and drove interest on not just that bottling but Japanese whisky more broadly,” explains Matthew Fergusson-Stewart, chief marketing officer of TSH Corporation Limited that’s behind whisky focused Quaich Bar (at South Beach and Waterfront Plaza).

The Yamazaki 12

The Yamazaki 12

The closest it came to becoming a global phenomenon before this was in 2003, when Suntory’s Hibiki 17 Year Old made an appearance alongside Bill Murray in the movie Lost in Translation.

IWSR, a company that measures beverage alcohol data based on local market insights and analysis, noted in its Global Trends Report in 2017 that Japanese whisky saw an exponential growth of 72.1 per cent in 2016 in the US alone. The same year, measured volume increased by a further 7.7 per cent from 2016, reaching a total of 13.3 million nine-litre cases and beating out fellow contender, Irish whisky, which came in at 8.1 million cases.

(RELATED: How Yamazaki became world’s best whisky)

The shortage

All this acclaim came at a cost as it became increasingly difficult to get a taste of Japan’s liquid gold.

As of January 2019, whisky lovers bid farewell to the Nikka 12 Years Old and Suntory Kakubin White Label. Suntory announced back in May 2018 that they would cease sales of Hakushu 12 Year Old and Hibiki 17 Year Old, while Kirin just sent out its last shipment of Fuji Sanroku Tarujuku 50° in March. Other fallen soldiers include aged expressions from Yoichi and Miyagikyo under the Nikka brand.

Prices have rocketed to stratospheric levels, as speculators and investors flip bottles on trading sites and auctions, laments Arun Prashant, a veteran in Singapore’s whisky scene and co-owner of The Swan Song.

Adding fuel to the fire, he adds that older vintages are going to finish at some point and, consequently, are priced highly.

Supply is clearly not meeting demand. Aging whisky takes time and there just isn’t much aged stock lying around. When a whisky labels itself as 17 years old, the youngest in the blend would take at least 17 years to be ready.

“Whisky, particularly those being aged for 10 or more years, were not produced in sufficient volume to sustain the new markets we see emerging today,” says Mr Prashant.

Japan’s history with the spirit explains the shortage.

While the industry boomed during the 1970s and early 1980s, it declined following the availability of imported whisky from Scotland. The final nail in the coffin came when the Scotch whisky industry won a World Trade Organisation ruling that eliminated taxes on foreign spirits in 1996. Locally produced whisky fell out of favour due to higher prices. It didn’t help that it transpired during Japan’s economic stagnation (dubbed the lost decade). Distilleries slowed down production, or, worst, shuttered its doors.

Is the shortage for real?

Before you head off, scrambling for the last drops of a Yamazaki 25 Year Old, hear this: experts are weighing in with a unanimous ‘No’ when asked if there was indeed a shortage of Japanese whisky.

“The shortage is largely around aged whiskies. Increased supplies of non-age statement (NAS) whisky can be on the shelf within three years of deciding to increase production,” says Mr Fergusson-Stewart.

That seems to be the strategy of many distilleries.

(RELATED: Suntory’s latest whisky Yamazaki Mizunara 2017 Edition set to spark a frenzy among collectors)

Nikka, for example, is celebrating the 50th anniversary of Miyagikyo Distillery with two NAS single malts containing whisky distilled from the 1960s to 2000s, while Suntory launches Ao, a blend featuring liquids from the five largest whisky-making regions across the globe.

Iwai whisky from the Mars Shinshu distillery

Iwai whisky from the Mars Shinshu distillery

Currently, Japan has a total of 23 distilleries; some new, some coming out of hibernation. Artisanal distilleries such as Akkeshi, Mars Shinshu and Wakatsuru Saburomaru, are upping their game in Asia (including Singapore) market with NAS releases as well.

The only challenge for NAS? The larger public is still sold on the idea that the older a whisky is, the better the quality

“Arguments for and against age statements rage ad-infinitum,” shrugs Mr Prashant.

While the general consensus is that age statements are important (time spent in the cask rounds out the harsher elements of a new make spirit), Mr Prashant’s colleague Fong Chan Teng says that sometimes too much of a good thing can be counterproductive. “There’s a tendency to be overly oaky or have a tannic aftertaste.” In his experience, some of the best are between 12 to 20 years old, with some as young as eight.

New age statements

Yo Tang, international brand manager for Japanese whisky & gin, Beam Suntory, agrees. Experience has shown him that age is not the only indicator of a quality pour. Every barrel ages differently; some reaching their peak flavour at 30, some at five years.

So, why this preconceived notion that the bigger the age statement, the better the whisky?

Turns out it was marketing.

(RELATED: Here’s what industry experts in Singapore say about non-age statement whiskies)

Mr Fergusson-Stewart put it best. “The industry has flip-flopped on the messaging. Back in the 80s, the whisky industry was in a slump. Many distilleries, particularly Scotch, had high levels of stock that continued to age. It suited them to stress the importance of age to fetch higher prices for the said stock. Today, stocks are lower. It makes more sense to drive attention away from the age, and draw focus on the cask and flavour.”

Making flavour the focal point has opened up the concept of blends to many. “By removing an age statement from a label, it allows us to use these truly high quality whiskies which have peaked at, say, five years, to produce a refined yet complex final product,” explains Mr Tang.

What’s next?

For those still yearning for a taste of Japanese whisky, pre-crisis, Singapore is home to many bars that stock a decent amount of Japanese whiskies. This includes pioneers such as Auld Alliance, La Maison du Whisky, Quaich Bar and La Terre. Collectors are also turning their stash into a booming business, like The Swan Song, which, as the name suggests, feature bottles that have been meticulously sourced and is the only (or at most a few more) bottle available. The Writing Club, likewise, is owner Tan Soo San’s personal collection.

Another way is to head straight to Japan for the famed Chichibu Whisky Festival or, if you’re really lucky, you might well find the elusive Karuizawa in a random bar. Or there are online auction sites, such as whiskyauctioneer.com.

The shortage, or crisis for dramatic effect, is affecting but a small part of the Japanese whisky pool. Singapore’s whisky drinkers are on the rise and, chances are, newcomers would have a better time now. Artisan distillers are now releasing bottlings beyond the domestic market. If anything, consumers now have an array of options that, hopefully, won’t cost an arm and an leg.

(RELATED: Japanese whisky tastes nothing like scotch)

This article was originally published in The Business Times.

Photos: BT/SPH