Record Prices, Falling Market: What's Up With Japanese Whisky?

If you looked at this year's highest-selling bottles at auction, you might think the market for collectible Japanese whisky is in rude health.

You’d be wrong.

The latest headline sale came this week, when the Karuizawa 52 Year Old Cask #5627 The Prototype sold for $625,000 at Sotheby’s New York. That is not even the highest price paid for a bottle of Karuizawa this year. That record belongs to Karuizawa 52 Year Old Treasure Ship, which sold for $797,000 at Bonhams Hong Kong in May.

Both of those prices pale in comparison to this year’s top result: $1.05m for a bottle of Yamazaki Club Natsume 50 Year Old, which now stands as the most expensive bottle of Japanese whisky ever sold at auction.

Karuizawa 52 Year Old Japanese whisky — The bottle came with a handwritten note from the master distiller / ©Sotheby’s

You almost have to feel sorry for The Yamazaki Single Cask #2J6001, which fetched a hammer price of $280,790 in June. It doesn’t even make the podium, despite selling for far more than any bottle of Scotch or American whiskey this year.

These bottles have come to market hot on the heels of a pair of Karuizawa casks, owned by one of the ghost distillery’s original advocates, Sukhinder Singh, which sold for $2.85m each, including fees, at Christie’s London in March.

But while these results inject some energy into a beleaguered market, they are likely the exceptions to the rule. Whiskystats tracks auction markets across the globe, and its Japanese Whisky Index, which combines the 100 most traded bottles in the category, is down over 75 percent from its January 2022 peak. Even this year it has been volatile, with a strong first quarter followed by a sharp fall in the second.

The Yamazaki 50 Year Old Club / — The Yamazaki 50 Year Old Club Natsume / ©Bonham’s

That 2022 spike was an anomaly, fuelled by the Covid-19 pandemic on top of an aged-stock shortage that predated it. People were saving money and drinking at home, and as demand rose, some distilleries aggressively increased prices. Now values have gone down, and once-popular bottlings are marooned at prices that no longer make sense.

So what sets these bottles apart, and why are so many coming to auction?

Jonny Fowle, global head of spirits at Sotheby’s, told The World of Fine Spirits: “Over the last few years, the Japanese whisky market as a whole has seen a decline in value, as has the rest of the whisky market. However, truly rare bottles in both the Scotch and Japanese whisky categories sit outside of these market trends.

“When we hold the Distillers One of One auctions, where every bottle offered is unique, the results tend to outperform more accessible bottles in the market by a significant margin. The Japanese whisky bottles offered recently are extremely rare and have all performed exceptionally well.

“The consistent trend is that buyers become more easily fatigued by the relatively accessible high-value bottles and are instead on the hunt for true rarities, whether they be Japanese or Scotch.”

Fowle’s point suggests that for the biggest collectors, little has changed. They are willing to spend big money, but only for something truly rare. The Karuizawa Prototype meets that specification. Fowle claims it is the rarest Japanese whisky in the world. It’s one of only two bottles drawn from the oldest cask in Karuizawa’s fabled inventory. It was bottled by Osami Uchibori, the final master distiller before Karuizawa’s closure, and comes with a handwritten guarantee from him.

two whisky casks — Two Karuizawa casks sold for $2.85m each in March / ©Christie’s

The Yamazaki Club Natsume 50 Year Old is the same. It was distilled in the mid-1950s and bottled in the mid-2000s to mark the 50th anniversary of Club Natsume, a private members’ club in Nagoya, Japan. Before appearing at Bonhams Hong Kong on May 30, it had never been auctioned. For anyone intent on owning one, this stood as possibly the one and only opportunity to do so.

The Karuizawa 52 Year Old Treasure Ship comes from the same cask (#5627) as the Prototype. However, it was bottled at a lower strength (51.8% ABV) as part of a 41-bottle series. The Prototype was one of two (Sotheby’s doesn’t state where the other is) and was bottled at 58.3% ABV.

In that sense, you’d expect the Prototype to be the more valuable of the two. But until recently, no one knew it existed, and its history since bottling hasn’t been made public. Gaps in a story tend to widen in buyers’ minds as the price goes up.

Cask #5627 has had quite a year. A third bottle from it, The Poet, sold at Whisky Auctioneer in June for a hammer price of $264,943. That’s less than half the Treasure Ship’s hammer price, despite coming from the same 41-bottle release and differing only in the netsuke hanging from its neck and its label design.

It’s a fitting summary of the market as a whole. Whiskystats noted that this year’s record results landed in the same quarter its Japanese index fell 10.6 percent – proof of how volatile the market can be, and how far the very top has drifted from everything beneath it.