JAPAN INTRODUCES LAWS GOVERNING WHISKY PRODUCTION

JAPANESE WHISKY INDUSTRY TO MOVE FROM ITS LAISSEZ FAIRE ATTITUDE

The history of Japanese whisky isn’t all that long compared to say, the history of Scottish whisky. Nevertheless, the Japanese have managed to produce some of the best whiskies in the world, known throughout the world for their distinctive taste and high quality. They win award after award, putting competitors to shame. Famed for their mild texture and pleasant aroma, they rival the best whiskies Scotland can offer, and some say Japanese whisky makers even outdo the Scots! How did this nation manage to produce such high quality whisky?

Whisky drinking in Japan is as old as Japanese modernity itself. In 1853, when Commodore Matthew Perry sailed his big black ships to Edo harbor, forcing the reluctant samurai rulers to open Japan to trade, he brought with him a few barrels of whisky to keep himself and his crew warm on the long voyage across the Pacific. He also intended to demonstrate American prowess and ingenuity to the Japanese, and what better way to do this than to present the Emperor with the best of what America had to offer? One of the things he presented was a 110-gallon barrel of his finest whisky. There are no stories about what the Japanese court thought about this gift, but presumably they put this strange, amber-coloured, pure-looking beverage to good use.

Only two decades later, the Japanese began importing whisky, and local brewers also started making their own versions. This early “whisky” was actually just alcohol with a similar colour to whisky; it wasn’t very refined, to say the least. And the problem today has assumed huge proportions. Mamoru Tsuchiya, one of Japan's leading whisky experts is worried about the future of his country’s whisky. Sales are booming, but there’s a problem: A large amount of the liquor isn’t actually made in Japan, he says.

Some of it isn’t whisky at all. “There are a lot of situations where you call it Japanese whisky, but they’re using imported Scotch or Canadian whisky,” he says. Global demand for Japanese whisky has exploded over the last decade — bottles like the Yamazaki 18 Year Old, which once collected dust at $100, sell for five times the price and are now almost impossible to find. The dollar value of exports to America grew by nearly 50 percent in 2019 over the previous year, according to the Distilled Spirits Council of the United States.

But unlike most whisky-producing countries, Japan has few rules about what constitutes whisky, let alone what makes it Japanese. Companies can buy spirits in bulk from abroad, bottle and label it “Japanese whisky,” and ship it back out. They can export aged shochu made from grains, like rice or barley, for sale in America as whisky. Some so-called distilleries don’t even do any distilling; they import the whisky in bulk and contract another company to bottle it.

It’s a regulatory Wild West that both established distilleries and start-ups are taking advantage of to feed growing global demand. It’s also a potential public-relations disaster: The internet is already rife with articles claiming to pull back the curtain on the myth of Japanese whisky. While many of the premier brands, like Yamazaki and its 18 Year Old, point out that they are made exclusively in Japan, others refuse to say. “It puts Japanese whisky’s reputation at risk,” says the founder of Dekanta, an online retailer.

In September, Tsuchiya, who runs an advocacy organisation called the Japan Whisky Research Centre, proposed a set of rules for Japanese whisky, including a requirement that it be distilled in Japan. The rules would be voluntary, but he planned to use the 2020 Tokyo Whisky and Spirits Competition, which he runs, as a carrot: Only products that met his criteria could enter as “Japanese whisky.” He received support from most of the distilling industry, as well as the Japan Spirits and Liqueurs Makers Association, an industry-funded, government-chartered agency that helps set nationwide regulations.

But because of the coronavirus pandemic, the competition and Tsuchiya’s proposed rules are on hold. While the industry and consumers wait to see what happens next, a new debate is underway: What is Japanese whisky, anyway?

Japan’s laissez-faire regulatory approach is rooted, at least in part, in its complicated history with the West. Its first recorded encounter with whisky came in 1853, when Commodore Matthew Perry, during his inaugural visit to Japan, gave his hosts 70 gallons of Scotch and American whisky. It was a hit among the imperial court, and the gift became a defining memory of a landmark cross-cultural encounter.

As part of its subsequent push to emulate the West, Meiji-era Japan encouraged the production of domestic versions of that same whisky. Japanese distillers often used sweet potatoes, which were abundant, but they produced a much different spirit than the barley, corn and rye used in Scotland and America.

From the get-go, Japanese whisky was not whisky as the rest of the world understands it according to a Tokyo-based whisky writer. No one gave much thought to defining it, he said, since it was entirely for domestic consumption. The bragging rights that came with having a homegrown whisky industry, and whatever tax revenue it generated, were more important than the precision of the end product.

The first modern Japanese whisky distilleries, including Yamazaki, didn’t open until the 1920s. While they were modeled on Scottish operations and often produced high-quality spirits, they did little to change the overall character of Japanese whisky, which, especially following World War II, was aimed at everyday salary-men looking for a quick drink after work.

The Japanese government introduced formal definitions for domestic whisky in 1989, but by then the industry was dominated by a few big distilling companies that wanted to keep the rules loose. After 1989, for example, whisky sold domestically had to contain at least 10 percent aged malt whisky; the rest could be unaged alcohol, typically made from imported molasses.

Both domestically and internationally, interest in Japanese whisky began to pick up in the early 2000s, snowballing through the next 15 years as the industry’s premium brands, like Hibiki and Yamazaki, racked up global critical acclaim. But distillers didn’t have enough fully aged product to meet demand, leading many established and start-up brands to start buying in bulk from overseas.

The Japanese whisky industry can be opaque, so it is hard to know which distilleries rely on foreign sources. Still, analysts point to fast-growing exports of Scotch and Canadian whisky to Japan in recent years, even as the retail sales of those whiskies remain flat — implying that most of the imported spirit is being bought by distilleries and relabelled as Japanese.

One company that has been open about its sources is Nikka, which makes whisky in Japan and owns the Ben Nevis distillery in Scotland. Domestic supply shortages force the company to use “a small amount of whisky from overseas” to meet demand. Imported Scotch is a critical ingredient in creating Nikka’s flavour profile, in the same way that an American baker might swear by French butter in making an apple pie.

Some distilleries are coming clean by labelling their whiskies “world blends,” meaning a combination of imported and domestic products. These include Ao, from Suntory, one of the largest distilling companies in Japan, and Ichiro’s Malt & Grain World Whisky, from Chichibu, a highly regarded craft producer.

Unlike in Scotland, they do not exchange casks with other producers within the country. In order to create a complex blended whisky to meet this demand, blenders in Japan needed to look outside our country for whisky to realise their visions. Nevertheless, as more American whisky fans learn that Japanese whisky isn’t 100 percent Japanese, they’re increasingly unhappy. Much of the critical praise over the past decade leaned on generalisations about Japanese craftsmanship and ingredients, and drinkers are understandably angry to learn that the whisky in their glass might not even be made in Japan.

Tsuchiya proposed that distilleries use only grain in their mash, ferment it with yeast (shochu uses a different process), distill it entirely in Japan, and then age it for at least two years in a wood cask. The requirement of two years, instead of three like in Scotland, is because Japan has a more temperate climate and whisky ages faster.

THE BREAKTHROUGH

The Japan Spirits & Liqueurs Makers Association announced a new set of industry-wide regulations on 16 February 2021, effective 01 Apr 2021.

As explained in the article supra, despite the first whisky distillery opening in Japan in 1923, laws and regulations introduced only in the 1950s have remained largely unchanged since then. With demand for Japanese Whisky soaring in recent years, several producers have cut corners to meet those demands. It has long been known that a number of labels source whisky from Scotland and Canada, age it in Japan, and label it as Japanese Whisky.

The new regulations are designed to create more certainty around Japanese Whisky and bring it in line with the strict laws and regulations that other whisky-producing nations follow.

The Regulations

Although these regulations are not binding, it is certainly a step in the right direction for the industry. These “non-binding” regulations took effect from 1st April 2021. However, whisky brands have until 31st March 2024 to adhere to them.

• The only raw ingredients allowed for use in production are malted grains, other cereal grains, and water extracted in Japan. Malted grains must always be used.
• Fermentation, distillation, and saccharification must take place in a distillery located in Japan, with the alcohol volume of the distillate not allowed to go above 95% in strength.
• Wood casks with a maximum capacity of 700 litres must be used for the maturation of the distilled product and have to be matured in Japan for a minimum of 3 years.
• Bottling must take place in Japan, and the whisky has to have a minimum ABV of 40%.
• Plain caramel colouring (also known as E150a) can be added; this is a common practice in whisky around the world.

The move by the Japanese Whisky industry to put in new regulations around production and labelling that add to transparency was welcomed globally. However, as these regulations are non-binding and considering the fact that three fifths of all Scottish Whisky imported into Japan is in bulk containers, it is unlikely that they will quickly adapt to the new ‘rules’.

This presents what could be an interesting time for Japanese Whisky. The next few years will see big changes to a number of brands, who need to either change the way they produce their product, or drastically change their labels. It is believed this will mainly affect the lower-mid range of the market, while demand for the higher-end whiskies, and those distilled in Japan, will continue to rise as their origin is already well known.

Practical advice is to buy the best-known brands that have a history of using 100% Japanese distilled Whisky such as Matsui, Taketsuru, Miyagiko, Hibiki, Yoichi, Hakushu, Yamazaki and Kurizawa.