Why did Karuizawa Distillery cease production in 2000?

Rita Richards
Rita Richards
Whisky distiller with two decades of experience.

Ah, it's quite a pity when you talk about this. Simply put, Karuizawa was a victim of unfortunate timing, collapsing in the darkness just before the dawn.

You can understand it from these perspectives:

1. The overall environment was unfavorable; no one was drinking it anymore.

This was arguably the primary reason. Think about Japan from the 1990s to the early 2000s, a period often referred to as the "Lost Decades" – the worst time after the economic bubble burst. Everyone's wallets were empty; who had spare money to spend on expensive, sophisticated single malt whisky?

It's like opening a high-end wagyu burger joint, only for everyone around you to suddenly lose their jobs and be forced to eat instant noodles at home. Your business would surely fail. Karuizawa was that high-end burger joint at the time.

2. Domestic tastes in Japan changed.

In that era, Japanese youth didn't consider drinking whisky fashionable. They preferred shochu, beer, or various fruit-flavored "chuhai" (sparkling alcoholic drinks). Whisky was labeled as "an old man's drink," and its market shrank day by day. So, it wasn't just about not having money; young people simply didn't want to drink it.

3. Neglected by its parent company.

Karuizawa Distillery's parent company was Mercian, whose main business was actually wine. Whisky was just a small, consistently unprofitable side business for them. Against the backdrop of an economic downturn, when the company needed to cut costs, they naturally started with such unprofitable "burdens." Therefore, as the whisky market continued to shrink, the parent company decided to pull out and simply shut it down.

So, to summarize: Poor economy (no one could afford it) + changing tastes (no one wanted to drink it) + corporate strategy (abandoned). With these three major pressures, even a deity couldn't have saved it.

What's truly ironic is that just a few years after its closure, Japanese whiskies, led by Yamazaki and Yoichi, suddenly gained international acclaim, winning numerous awards and sparking a global Japanese whisky craze. Meanwhile, Karuizawa's remaining old stock, due to its unique heavy sherry style and discontinued rarity, became highly sought-after treasures by collectors worldwide, with prices skyrocketing.

What a shame, it didn't survive to witness its own glory.