Booming demand leaves Japan’s whiskey lovers dry
  • Friday, November 16, 2018
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Booming demand leaves Japan’s whiskey lovers dry

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TOKYO >> Some Japanese whiskeys are in short supply due to their increasing popularity in overseas markets and a recent domestic boom of highballs, or whiskey and soda.

Under such circumstances, Suntory Spirits, an affiliate of Suntory Holdings Ltd., announced plans to suspend sales of two of its whiskeys — Hakushu 12 Years and Hibiki 17 Years — beginning this month. While makers are preparing to increase production, the shortage will likely last for some time because of the lengthy whiskey aging process.

Since the shortage was reported, customers have flocked to the whiskey corner at the Kintetsu department store flagship shop at the Abeno Harukas commercial complex in Osaka. “I’m shocked as they are my favorites,” said a 43-year-old company employee, who had looked in vain for the Hakushu and Hibiki at several stores.

The suggested retail prices are set at $76 U.S. for Hakushu and $108 for Hibiki. The department store has restricted the sale of the Hakushu 12 Years to one bottle per customer over the past few years and began refusing to accept reservations for the product about a month ago.

In an online auction, the price for Hakushu has surged to hundreds of dollars.

The Japanese whiskey market reached its peak in 1983 but shrunk until bottoming out in 2008. The market has been expanding since then, triggered by a surge in the popularity of highballs that boosted whiskey consumption.

Additionally, Japanese products have received high international praise, as illustrated by Hibiki 21 Years, which won the Supreme Champion Spirit at last summer’s International Spirits Challenge 2017, a competition held in Britain. Exports of Japanese whiskeys stood at nearly $124.5 million in 2017, a more than tenfold increase over the past decade.

However, it takes at least several years to age whiskey, and makers are finding it difficult to meet the rapid increase in demand.

Of the whiskeys that Suntory sold in Japan last year, Hakushu and Hibiki accounted for 1 percent, while their lower-priced brands made up larger proportions, with Kakubin accounting for about 50 percent and Torys for about 20 percent.

Because unaged whiskeys are also scarce, other brands could also be suspended.

Kirin Brewery Co., which sells Fuji-Sanroku and other brands, also said it is finding it increasingly difficult to meet the growing demand.

Makers have already begun working to boost production. Suntory has invested about $265 million to expand facilities for distilling and storage from 2013 to 2018. Asahi Breweries increased production by 80 percent from 2015 to 2017.

“It takes time to age whiskey, which means it’s difficult to resolve the shortage issue immediately,” said Hideki Katsuda, a professor at Kindai University and an expert on the liquor industry. “On the other hand, it’s hard to make accurate forecasts for future demand, and makers could make massive capital investment (for boosting production) in vain.”

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