“The whisky market is continuing to grow in terms of volume and value for both domestic and imported whisky”

Slurring their words

Concerns over Japan’s loose definitions of wine and whisky

 


Text by Gavin Blair


Producers, retailers and imbibers of alcoholic beverages are some of the biggest beneficiaries of the removal of tariffs since the EU–Japan Economic Partnership Agreement (EPA) came into force on 1 February. Yet while many are toasting the lower prices and higher exports, not everyone is fully satisfied. The definitions of wine and whisky in Japan are surprisingly flexible and do not conform to international specifications, something the European Business Council in Japan (EBC) has long been pushing to have reformed. But the relatively recent spike in the popularity of Japanese whisky means a solution may be on the way, at least for half the problem.

Japanese wine has a strict definition: it must be made in Japan with Japanese grapes,” notes Yoko Maki, a member of the EBC Liquor Committee. “But in the supermarket, you can find lemon wine, strawberry wine, peach wine — any fruit.”

As long as no claims are made to its being Japanese, any fruity variation of the drink can be sold here and called wine. This stands in stark contrast to Europe’s insistence on vino coming only from grapes. Japan’s domestic wine industry has thus far shown little interest in modifying this loose definition. But if, in the future, wine’s status begins to mimic the meteoric leap of domestic whisky, that may change. There are early signs this could be more than a pipe dream.

Kirin’s winemaking subsidiary Mercian announced in March it would begin exporting two of its Château Mercian varieties to the UK, a decision made in light of the EPA. The two wines are made with grapes from Yamanashi, the only Japanese wine region recognised with a geographical indication (GI) under the EPA. And in late May, Mercian said it will open a third winery in Nagano later this year, where it will produce 10 types of Château Mercian.

Meanwhile, Japanese whisky has well and truly established its brand. The record-breaking $343,000 paid at a Hong Kong auction last August for a 50-year-old bottle of single malt Yamazaki is testimony to this. The first edition sold for a less pricey, if not exactly cheap, $9,000 (¥1 million) when it went on retail sale in Japan in 2005.

“The whisky market is continuing to grow in terms of volume and value for both domestic and imported whisky,” says Maki, who also suggests that many consumers are unaware of the difference in definitions between the two.

Led by brands such as Yamazaki, Hibiki and Hakushu, which are all part of the Suntory portfolio, Japanese whiskies have been finding fans far and wide. This popularity, which includes a doubling of domestic sales over the past decade, as well the export boom, have seen stocks running short and even sales of some brands suspended.

When asked about the prospect of selling more whisky in the EU, a Suntory spokesperson said, “Demand outweighs supply and we’re limiting supply at the moment. We’ve been making investments in capacity expansion of whisky and will continue our efforts to meet future market demand.”

Yet there are, in fact, few restrictions on what can be labelled “whisky” in Japan, certainly compared with those for Scotch, which, along with Irish whiskey, has been given GI protection under the EPA. Stipulations for Scotch include being made in Scotland, from water and malted barley, to which only whole grains and caramel colouring may be added, using a strictly defined process. It must also have a minimum alcohol content by volume of 40% and be aged in oak casks for at least three years.

In contrast, the Suntory spokesperson declined to even confirm the age or the alcohol by volume of its various whiskies.

One of the reasons for this difference in attitude is the history of alcohol production in Japan. Until now, the government has looked at it as merely a source of revenue rather than an industry with valuable brands, according to Osaka-based Brian Ashcraft, co-author of Japanese Whisky: The Ultimate Guide to the World’s Most Desirable Spirit.

“Traditionally, Japanese whisky has never been something that anyone wanted to copy or that needed protection,” says Ashcraft. “There was never a thought to that — it was just something to be taxed.”

Although there are companies that have taken advantage of the lax regulations by importing whisky and putting it on sale with ambiguous labels, most are upfront about the composition and origin of their products, according to Ashcraft.

“It has also led to a lot of creativity: for example, using woods other than oak,” explains Ashcraft. “There are casks made from sakura. It’s a new flavour; the whisky smells like sakuramochi,” which are sweet rice cakes wrapped in pickled cherry blossom leaves.

Nevertheless, the international importance of Japanese whisky is now being realised, and a definition was included in the Trans-Pacific Partnership (TPP) agreement, points out Ashcraft.

“It’s a brand now,” he adds.

The EBC Liquor Committee’s Maki notes that it is “urging the adoption of a stricter definition of whisky in Japan.”

Discussions are already underway between the major Japanese producers of whisky and the Japan Sprits & Liquors Makers Association over how to define the tipple. Though no official statement has been made, the Japanese whisky industry — cognisant of the value of a product that can now fetch hundreds of thousands of dollars for a single bottle — is reportedly pushing for stricter regulation.

The impact of tighter rules isn’t easy to predict. Japanese whisky is so popular it is struggling to meet demand, while imported whiskies are also benefiting from the booming local market. The most likely result may be the disappearance of local varieties that weigh in at less than 40% alcohol by volume, and it’s unclear whether that would boost the brand image of Japanese whisky.  

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