Over the last decade, Japanese whisky has been one of the best preforming sectors of the international whisky market. Between 2010 and 2019, American imports of Japanese whisky grew fifty-fold. According to The Single Malt Fund, in 2020 the “RW101 Apex 1,000, the benchmark index for rare whisky, grew by a steady 6.7%,” while the “RW Japanese 100 grew by 18.7%.”
Historically, the rules governing the labeling of Japanese whiskies were flexible. Unlike most whisky producers, Japanese bottlers were not required to produce or mature whisky in Japan in order to use the designation Japanese whisky. Many Japanese producers blended whiskies from Scotland and elsewhere into their Japanese stocks. The resulting bottlings still carried the designation Japanese whisky. This practice was particularly true of Japanese blended whiskies.
Recently, I sat down with Liam McNulty to take about the state of Japanese whisky and how it will be impacted by the recent adoption of new labeling rules.
Liam McNulty has lived in Tokyo since 2008, and runs nomunication.jp, an English-language Japanese whisky and spirits blog. He also sits on the executive committee and serves as a judge for the Tokyo Whisky & Spirits Competition.
JM: The rules governing the labeling of Japanese whisky have always been loose, although they have been tightened of late. What’s the current regulatory framework for labeling Japanese whisky?
LM: The new standard introduced to define Japanese whisky is industry-led, being implemented by the Japan Spirits & Liqueurs Makers Association (JSLMA). The JSLMA standard allows imported malted barley and other grains, but the water must be extracted in Japan. It also requires saccharification, fermentation, distillation, maturation, and bottling to happen in Japan.
Maturation has to be at least 3 years and in a 700L or smaller wooden cask. They deliberately left out requiring that cask to be oak to allow other wood such as cedar, chestnut, and or cherry. They also require the spirit to meet the National Tax Agency’s definition of whisky: this precludes koji spirits like shochu from being labeled as Japanese whisky.
The law defining categories of alcoholic beverages in Japan is called the Liquor Tax Act, and it remains unchanged. The Liquor Tax Act’s definition of ‘whisky,’ requires only 10% of the final product to be whisky as the rest of the world knows it. The other 90% can be molasses-based spirits, for example.
The law makes absolutely no mention of Japanese whisky. My understanding is the National Tax Agency (NTA) has no intention of changing the law either: their primary concern is tax revenue, rather than protecting the Japanese whisky brand image. Given that Japanese whisky overtook sake to become the country’s most valuable alcoholic beverage export in 2020, I hope they’ll see the bigger picture soon.
Because the law hasn’t been changed, it’s still not illegal to label any whisky—made in Japan or not—as Japanese whisky. Not every licensed distillery or bottler in Japan is a member of the JSLMA either, so the JSLMA rules certainly aren’t all-encompassing. And this is just here within Japan; global protection for the category is required too. There’s still a lot of work to do.
JM: On average, what proportion of the whisky labeled as Japanese whisky is actually produced and matured in Japan and what percentage is actually imported foreign whisky?
LM: I unfortunately don’t have any data to back this up, but the number I’ve heard is that the above JSLMA standard will apply to about 10% of the volume of whisky in the Japanese domestic market.
The loose legal definition of whisky means the lion’s share of the whisky market in Japan is whisky-like products that fuel the izakaya highball culture. They aren’t the kinds of bottles that connoisseurs seek out but they’re an important part of Japan’s relationship with whisky, past and present.
The makers of these bottles know that the vast majority of the Japanese public isn’t terribly concerned about where the whisky in their 350 yen highball comes from. Even if the products don’t qualify as Japanese whisky under the new standard, there shouldn’t really be an impact on sales.
The overseas market is a different situation. Those cheap whisky-ish products can’t be labeled as whisky in many foreign markets, so they usually aren’t exported. Where major players haven’t been able to meet the growing demand for genuine Japanese whisky overseas, other companies have stepped in.
Some are importing bulk foreign whisky into Japan, bottling it here, and labeling as though it were Japanese whisky. Others are exporting cask-matured shochu and labeling it as Japanese whisky. Still others have built their own whisky distilleries and are fully supportive of the JSLMA standards.
JM: Is the use of foreign whiskies limited to just blended whiskies or does it include Japanese single malts?
LM: Typically, they are blended whiskies, but there are many bottles using malt whisky imported to Japan. Pay careful attention to the label, as these generally aren’t labeled as “Japanese Single Malt.” Instead it’s often “Japanese Malt Whisky” or “Japanese Blended Malt.”
JM: Is it just Scotland that is supplying whisky to Japan or are other countries involved?
LM: Since 2017, the import data provided by Japan Customs no longer makes a distinction between bulk whiskies and bottled whiskies, so with no recent public information, it’s difficult to say for sure.
Historically bulk whiskies have also been imported from Canada, the US, and South Africa. Kirin’s relatively new Riku Land Discovery, for example, noses a lot like bourbon, and it’s labeled as whiskey rather than whisky. Kirin owns Four Roses. They haven’t explicitly said it, but it all fits together pretty well.
JM: You have been pretty hard in the past on what you call phantom Japanese distilleries; i.e., brands who bottle their whiskies as Japanese whisky but don’t actually produce or source any of their whisky in Japan. How widespread a problem is this practice?
LM: Given the supply shortage of genuine Japanese whisky, I’d guess that a majority of the “Japanese whisky” you see on shelves in liquor stores outside of Japan nowadays isn’t distilled in Japan. It’s tough to measure the impact.
The nightmare scenario is that someone new to the category overpays for a bottle of sub-par whisky that isn’t even Japanese. They buy it because they heard good things about Japanese whisky, it’s in the Japanese whisky section at their local, it has kanji on the label, and it says something about samurai or geisha. If they’re disappointed in it, they might not try Japanese whisky ever again.
JM: Kurayoshi and Tottori are two Japanese brands that you have criticized for relying primarily, if not entirely, on foreign sources of whisky for their bottlings. Kurayoshi is finally distilling in Japan though it is unclear if any of this whisky has appeared in their bottlings.
I do note, however, that Kurayoshi has won numerous awards in international spirit competitions. Are you being too hard on them? As long as they are bottling a great whisky does it really matter where the whisky is ultimately sourced?
LM: Kurayoshi has indeed won awards in international spirit competitions. I will never be opposed to bottles winning awards based on the sensory experience. Blending is a skill that deserves recognition.
But when a bottle doesn’t contain a single drop of whisky distilled in Japan yet wins awards in the Japanese whisky category at a competition, it undermines the hard work that distillers of genuine Japanese whisky put in to continuously improve their products.
Spirits competitions typically rely on the regulations surrounding spirits to define their categories. If a bottle comes from an American distillery and it’s entered in an American whiskey category, the organizers are—understandably—assuming it was actually distilled in the US.
There’s almost no chance that someone would import whisky from Scotland, label it as an American Single Malt, and go on to win Best American Single Malt. This is exactly what sometimes occurs with Japanese whisky though, because Japanese whisky doesn’t have the same kind of protections surrounding the term.
Now that there’s a standard in place, competition organizers no longer need to start from scratch to establish entry requirements for their Japanese whisky categories. The Tokyo Whisky & Spirits Competition was the first to do this, even before the JSLMA standard, back with the 2020 competition.
I understand there’s some movement internally at a certain US-based competition to align their Japanese whisky category with the new JSLMA standard as well. I hope that other competitions around the world follow suit. If they decide to create a separate category for whiskies that are only “blended” in Japan, that’s entirely welcome.
JM: What do you think are the best values in Japanese whisky today? Can these whiskies be found in the US? If not, where can they be purchased?
LM: The days of picking up decade+ matured Japanese whisky for cheap are long gone. For a lot of people, the premium associated with Japanese whisky today is impossible to justify when there’s so much great whisky available from other parts of the world.
That said, the below bottles have made their way across the Pacific and shouldn’t break the bank.
· Yamazaki 12 can serve as a great introduction to Japanese single malts, and as far as I can tell, it’s actually easier to find in the US than it is here in Japan.
· Chichibu’s The First Ten had an allocation for the US. The bottle has been highly praised as one of the best releases of 2020. It will be nigh impossible to find for a decent price at retail, so COVID-permitting, just have a dram of it at a bar.
· Mars Whisky’s Komagatake Limited Edition is a single malt Japanese whisky released annually from the company’s distillery in Shinshu. There’s a US allocation for it as well. It should be relatively affordable if you can find it.
· The go-to budget bottle for many has been Nikka From the Barrel, but with the new JSLMA standard Nikka had to finally come clean that it wasn’t entirely Japanese whisky. It’s still a great Japanese-style whisky though.
JM: Thank you.