Karuizawa Topples The Macallan In 2015

Karuizawa1960.jpgI’ve just begun reading the March issue of Whisky Magazine and in this edition there is a quite significant post in regards to Karuizawa. The Whisky Magazine Index collates the prices of live auction sites over a 12 month period and has been running since 2007. Since inception, The Macallan has taken top spot for whisky prices each year. Well each year up until 2015. This was the year that a Japanese Whisky Distillery took over the number 1 position and unsurprisingly it was Karuizwa. To save a lengthy explanation in this post as to how the index works you can check out the following link.
Now back to unsurprisingly, I only say this because it is well known now in the whisky world the stratospheric prices being fetched by Karuizawa on the auction circuit. The WMI shows the average price for Karuizawa’s in 2015 at a scarcely believable GBP2,500 a bottle compared to second place Macallan GBP1,700. I also agree with WM’s assessment that prices consolidated in the second half of the year rather than any significant fall.
What is surprising is how quickly it has happened since Japanese whisky gained a foot hold in markets outside of Japan. Karuizwa produced and sold whiskies for decades including single casks in Japan before we starting seeing them outside of their homeland. It has been correctly stated a number of times that the Japanese whisky industry was in the doldrums for many years in Japan. Karuizawa was not much better known in Japan for all those years than it was outside of Japan. I would actually go as far as saying unloved for the most part in Japan, Hanyu the same. The bigger companies such as Nikka and Suntory could still churn out enough blended whiskies during that time to continue viable production runs. Of course this lack of love for Japanese whisky at home meant the smaller players either closed or stopped production of whisky in favor of producing other types of alcohol. Yes, we know that that it was a decision by the Japanese conglomerate Kirin to close Karuizawa, but if you think about the conditions at the time, from a purely corporate perspective there was no reason to keep it open.
Now for some personal perspective on Karuizwa whisky. Firstly, what is the formula to get to the number 1 spot for auction prices from what was really a base of zero about 7 years ago. Number one has to be lucky in historic timing. As the planet gets smaller through the world wide web, the upper middle and wealthy classes swell in developing economies and peoples tastes broaden, the conditions are right for something unknown to become a sensation. This is not just in regards to Karuizawa but Japanese whisky as a whole. Secondly was a company founded by non Japanese natives who took a leap of faith to distribute Karuizawa, Hanyu and Chichibu in the UK/Europe because the Japanese who owned these companies where never going to do that under the conditions in Japan at the time. That distribution began right around the time the first conditions where coming into play outside of Japan. Thirdly, that company have also proven to be brilliant at marketing. Fourthly, the world’s best known and influential whisky blogger writes for the most part dazzling high scoring reviews of Karuizawa and writes this type of review for a significant number of bottling’s basically since Karuizawa was first released outside of Japan. Fifth would be rarity, Karuizawa will always be rarer than any of the high prices Scottish whisky distilleries listed on the index. Sixth, the Japanese have fallen in love with their own whisky in the last 18 months and are now alert to the prices they can sell them for. Lastly myth, how many of these Karuizawa are actually being opened at these prices and how what sort of cross section of tasting reviews are there on the web and that includes whisky forums driven by consumers? Compared to Scottish whisky very few in either scenario. A lot of reviews have been by the retailers who are selling them so I am sure they are totally unbiased : ). So what are we basing the legend on, in reality bugger all! Still, if you are retailer or collector who is buying and selling Karuizawa for a profit, you are more than happy to perpetuate the myth even if you have never tasted a Karuizawa in your life.
Personally I think Karuizawa is the most overrated whisky distillery in the world and have found a number of bottling that I just cannot drink, certainly more than from any other Japanese distillery. Basically the one’s I can’t drink just sit in the cupboard though I have allowed some family to use them to drink with their favorite mixer. This is not to say I have not tasted some very good to excellent Karuizawa, it’s just they are not anything like equal to the legend to my tastes.
To finish I’ll add that there are 5 Japanese distilleries/brands listed in the top 25 of the index in 2015, the others being Hanyu, Yamazki, Hibiki and Nikka. Hanyu is sitting at number 6 and although the rise in prices for 2015 were 5.6% compared to Karuizawa’s 7.4% I believe the greatest part of the percentage for Hanyu was in the second half of the year’s compared to Karuizawa where it was in the first half of the year. Any bets that in the next few years it will be a one-two for Japanese whiskies at the top of the index……………

4 thoughts on “Karuizawa Topples The Macallan In 2015

  1. Many thanks, Brian, for what I consider to be a pretty good summary of how Karuizawa got to where it is today. I guess Number One Drinks were lucky in getting the timing right but we certainly have to commend them for bringing up the courage to take Karuizawa under their wings in the first place. So, fine with me if they can reap the harvest from their investments now. As to the general quality of Karuizawa, I am afraid in my opinion the range is super wide, from almost abysmally low to stellar. Cask #162 remains one of my alltime favourite single malt whiskies ever, while cask #7924 is stuck in my memory as a pretty foul-smelling balsamic vinegar concoction. There is probably no cask the Number One Drinks will not bottle, not a surprise given the prices they can fetch with every new release. Thus, I am glad to have tasted some good bottlings but I can certainly do without any new ones and rather focus on all the other good stuff that is around, including Japanese whiskies.

    • Thanks Brian for this article, always as interesting and intriguing.

      It’s funny Pierre, that you should give these two references as an example for the gap that may exist between some of the Karuizawa bottlings… since i would probably have given the same examples !

      c.7924 was my worst Karuizawa experience, very disappointing… for a while, less now, since the bottle was open for years now (since 2011 when it came out), and the level is very low now, i must acknowledge that it has lost the nasty sulphury and kind of petroleum notes to slowly become a decent Karuizawa towards the end (but not the best of couse, far from it).

      c.162 has always been an example of some of the best 1980’s bottlings – the level is so low now in my bottle that i haven’t tasted it again for about a year – too afraid to put an end to it !

      Overrated is probably the famous 1967 – probably because of the vintage and thus (supposed) rarity. It is a very good Karui, but not one of the best if you manage to forget about the vintage and hype. Underrated at the contrary is the 1971 c.1842, which is – in my opinion – probably THE best Karuizawa ever (though i haven’t tasted the 1960, 1965, etc.). Strangely, i’m not even sure i have ever seen one tasting review of it ?

      Many of the really insane prices have shown a downward trend lately – again the overrated 1967: in a way, collectors/speculators were ready to pay over 10k euros for a bottle they felt was underrated because of the 1960 & 1965 prices – a stupid assessment probably. What they may have forgotten is that, as soon as these bottles get to a certain level (a price at which any amateur will consider selling, to get other legendary bottles at a more “normal” price), people start selling them to take advantage of the madness… thus bottles keep on popping up at auctions, making it clear in the short/mid-term that they are not that “rare”… thus, logically, driving the prices down again (those who absolutely wanted them, well, they already have them by now, and those who thought they’d flip them, well, they now may have a doubt whether it’s such a good idea, especially if they had already bought them at 30% more).

      I guess we are currently in this “in between” period for the Karuizawa – part of the madness is fading, some of the rarer bottles still fetch indecent prices, but for most bottles, prices are on a (relative) rollercoaster, jumping from one auction to the next from 1800,- then 2700,- then again 2200,-…

      In the long term though, i do still believe that the upward trend for those prices will kick in again – though probably not as strongly as for the last 2 years.

      Still, the unanswered question that would give us the accurate perspective: how many bottles are actually being opened ?

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