Why is Japanese whisky so expensive?

Japanese whisky is one of the world’s leading categories alongside Scotch, American, and Irish whiskey. But you may have noticed that your average bottle will set you back a bit more than it will for the others. Why is that?

That’s the question we’ll aim to answer in this here guide: why is Japanese whisky so expensive?

A bit of history

To understand anything in life, you need to know your history. That’s either really sound logic or the justification you get from somebody who spent thousands on two history degrees they don’t use that much. Regardless, let’s go back to the beginning. 

You can trace the commercial production of Japanese whisky to the opening of Yamazaki Distillery in 1923. Nikka followed in 1934 and the category grew steadily from the late 1930s to the early 1980s.

By the decade of MTV, NES, and ET, however, Japanese whisky had ceased to be the cool drink. Shochu, a light, rice-based spirit, was the king of the castle and as whisky fell out of favour, the downturn forced distilleries to close or greatly reduce annual production. Nikka, the owner of the Yoichi and Miyagikyo distilleries, even went so far as to halt production for several years.

The changing tide

The dark ages weren’t particularly long, however, and just because people stopped drinking whisky, that didn’t mean that the whisky coming out of Japan was bad. A cult following developed in the 1990s from those who could get their hands on the good stuff and slowly but surely, the world began to wake up to the deliciousness of Japanese whisky. 

By the turn of the 21st century, award shows began to catapult Japanese whisky into the limelight. The likes of Yamazaki 12 Year Old and Hibiki 30 Year Old had more medals pinned to them than Horatio Nelson’s favourite jacket and by the time Yamazaki Sherry Cask 2013 won the Best Whisky Award the tide had well and truly turned. Japanese whisky was cool. 

The crux of the issue

If anything, too cool. With awards came demand, but as you might remember, a lot of distilleries had either closed or resorted to not making much whisky during the crash of the late 1980s. Some of the most in-demand whisky, such as Karuizawa, could never be made again. It closed in 2000 due to financial difficulties, and the distillery buildings were eventually demolished in 2016. 

This issue snowballed to the point distilleries couldn’t even make age-statement products. In May 2018, Beam Suntory announced it would have to stop selling Hibiki 17 Year Old and Hakushu 12 Year Old. “At the moment, demand outweighs supply, making continued sales difficult,” a spokesperson summed up. 

When supply falls, demand isn’t the only thing to rise: prices do, too. 

The average bottle steadily increased in price, while at the top of the market, the auction process went crazy. In November 2023, Sotheby’s broke the record for the most valuable collection of Japanese whisky ever sold at auction, bringing in a total of £1.8 million. One bottle of Karuizawa 52 Year Old Cask #5627 1960, the auction’s headliner, went for a price of £300,000. 

So, why is Japanese whisky so expensive?

Japanese whisky remains incredibly popular among whisky lovers and collectors alike today. 

The tide will slowly turn back a little as production has been ramped up in recent years. Distilleries are opening up (including a new take on Karuizawa) and plenty more are in commission all over Japan. But it will take a while for that to have any effect on price.

Japanese whisky is expensive simply because people want it very badly and there isn’t a lot of it, long story short. Is it worth it? Well, that depends on what Japanese whisky means to you. It’s all relative, after all. Nikka Whisky From The Barrel is pretty good value still, we reckon. For now…

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