Will Japanese whisky experience a 'vintage bubble' similar to red wine?

You've hit on a crucial point. Many people have this question when they see the current prices of Japanese whisky.

The simple and direct answer is: The 'bubble' in Japanese whisky has already appeared and is quite large, but it's not entirely the same as the 'vintage bubble' in red wine.

Let me break down the differences for you, and you'll understand.

First, we need to understand what 'vintage' means for red wine. Red wine, to put it plainly, is somewhat 'at the mercy of nature.' In a particular year, for example, 1982 in Bordeaux, France, the weather was perfect – just the right amount of sunshine and rain – leading to exceptionally good grapes and, consequently, wine of superb quality. So, '1982' itself became a golden hallmark. People sought after that 'great vintage.' In another year, say 1983, the weather was average, the grapes were average, the wine quality was a notch lower, and naturally, the price wouldn't go up. This is the concept of 'vintage' for red wine.

Whisky, however, is different. The core of whisky isn't 'when it was produced,' but rather 'how long it matured in the cask.' When you see 'Yamazaki 12 Year Old' or 'Hakushu 18 Year Old,' that number refers to the minimum time the liquid spent in oak barrels. It doesn't depend on the whims of nature, but on the distillery's patience and how much stock they have in their warehouses.

A bottle of 'Yamazaki 12 Year Old' bottled in 2020 contains liquid that was distilled and put into casks in 2008 or even earlier. Its quality depends more on the distillery's techniques, the type of casks used, and the skill of the master blender, rather than what the weather was like in 2008.

Therefore, the Japanese whisky bubble isn't a 'vintage bubble'; it's more like a 'supply shortage bubble' or 'scarcity bubble'.

So, how did this bubble inflate?

About a decade or so ago, Japanese whisky suddenly gained immense popularity after winning numerous international awards. Whisky enthusiasts and investors worldwide rushed to acquire it. But the problem is, whisky cannot be rushed! Distilleries can only sell as much aged stock as they laid down 20 years ago. Demand surged dramatically, but the supply was fixed, and in fact, distilleries hadn't even laid down that much stock years ago due to a sluggish market.

The result was:

1. Discontinuation: Entry-level age-statement whiskies like 'Hibiki 12 Year Old' and 'Hakushu 12 Year Old' had to be discontinued by distilleries because there wasn't enough aged stock. With fewer bottles available on the market, naturally, prices soared. It's the same principle as out-of-print books or rare records.
2. Speculation: Some distilleries with inherently tiny production, such as the now-closed Karuizawa, or limited-edition single casks, were directly treated as works of art for speculation. It's normal for their prices to multiply dozens or even hundreds of times.

So, you see, what people are scrambling for are 'age-statement,' 'discontinued,' and 'limited-edition' Japanese whiskies. This logic is different from how the wine world chases a 'good vintage.'

So, will this bubble burst?

I believe it's impossible for prices to fully return to the hundreds of yuan per bottle they once were. The reasons are simple:

• Time Cost: Although major distilleries like Suntory and Nikka are frantically increasing production, new spirits need to age for another ten or twenty years to become '18 Year Old' or '25 Year Old' whiskies. During this period, the scarcity of aged stock will persist.
• Collector's Item Status: Once something is labeled for 'investment and collection,' its price can no longer be solely measured by its cost. Like famous paintings or antiques, as long as there are buyers willing to take over, its high price can be sustained.

Of course, the current prices are indeed somewhat exorbitant, and there's certainly a lot of speculative froth involved. In the future, there might be some degree of pullback or stabilization, especially as distilleries release more non-age-statement whiskies to meet basic market demand, which could ease the prices of some overly hyped common bottles. However, truly rare, high-aged premium whiskies will likely only become more expensive, becoming a game for a select few wealthy individuals and collectors.

To summarize: Don't view Japanese whisky through the lens of 'vintage' like red wine. Its soaring prices are primarily due to 'fame too fast, maturation too slow,' leading to a shortage of aged stock and making it a rare commodity. This bubble is more like a frenzy centered around 'scarcity' and 'brand.'