Whisky

The legend of Japan’s most successful ghost distillery

By Ajesh Patalay
05-02-21

5 minute read

Almost two decades after closing, single malts from Karuizawa now count among the most expensive Japanese whiskies sold at auction – a history worth drinking to.

Long since decommissioned, the Karuizawa distillery was located on the southern slopes of Mount Asama, one of Japan’s most active volcanoes. At an elevation of over 2,780 ft, it had the distinction of being the highest distillery in Japan and took its name from the upmarket resort town where it was based, two hours by train north west of Tokyo. 

But, let’s rewind a little further to really set the scene. Originally the site was a vineyard, owned by wine and spirits producer Daikoku Budoshu, who decided to enter the burgeoning Japanese whisky market shortly after World War II. At first, the company used spirit sourced from Nikka, moving on to distill whisky at a site in Shiojiri in the Nagano prefecture, before unbeknownst to them making history – opening a distillery in Karuizawa, circa 1955/1956. 

Scotch malt was difficult to acquire in Japan at the time. Yet discerning whisky drinkers wanted the ‘real thing’, not some knockoff concocted in Japanese laboratories. The aim at Karuizawa was to produce whisky using traditional Scottish methods.  

Production began in early 1957. Given the size of the distillery – it was the smallest in Japan – the output was modest. There were three 4,000 litre Japanese-made stills (two wash, one spirit) and one 3,800 litre still, though this would later be used for second distillation on grape brandy not whisky. 

It seems ironic now, given how synonymous Karuizawa has become with single malts, but the initial plan was actually to distil spirits for use in the company’s blends. These would be bottled under the Ocean brand and sold to the domestic market. So far, not so investable…

How did Karuizawa cultivate such a distinctive whisky?

Mt. Asama Erupts
Mt. Asama in Karuizawa, Japan; photography by Kiyoshi Ota/Getty Images

How did Karuizawa cultivate such a distinctive whisky?

In the beginning, it was difficult to get enough malt to feed the stills and the distillery struggled. But in 1958, import restrictions were loosened and Karuizawa was able to ship in barley from the UK. The grain of choice? Golden Promise from Simpson’s of Berwick in Scotland, which was thought to give the whisky a heavier texture and oily character. It was also the grain used by Macallan, the Scottish distillery said to have inspired the type of wood Karuizawa used, namely sherry casks imported from Spain. 

Alongside these Spanish and British borrowings, the distillery’s surroundings were key to the whisky’s flavour. The water was filtered through lava, something you don’t find in the Highlands. Meanwhile, the weather alternated between chilly winters, highly humid summers and year-round mists – averaging out at a cool annual temperature of 10 degrees Celsius. Naturally, these conditions affected the whisky maturation and are credited with giving the malt its uniquely concentrated flavour, high alcoholic strength and ability to age well over decades.

THE TIMELINE OF KARUIZAWA’S CHANGING HANDS

Briefly: In 1962, Daikoku Budoshu merged with the Mercian Wine Company, best known for its authentic Japanese wine. In 1976, the distillery released its first single malt, though it continued to produce spirits for blending. But by the 1980s the whisky market in Japan was under strain, as beer and shochu took off and whisky consumption plummeted. While Karuizawa single malts continued to enjoy a reputation in Japan, they remained little known abroad. So, in 2001, after continued setbacks, Mercian was forced to close the distillery, 46 years after it had opened. (Although, as we know, that’s far from the end.)

In 2006, raising the possibility of its reopening, Mercian was acquired by Kirin Brewing Company, part of the drink giant’s efforts to diversify out of the sluggish domestic beer market. It was a false start on the whisky front, however, as the brewer’s principal interest turned out to be in Mercian’s wine business. 

Though Karuizawa’s spirits licence was reinstated in 2011, the distillery remained shuttered and in 2016, any remaining hopes of revival were dashed when the building was dismantled after years of lying dormant. Today, the stills are being used elsewhere, the site has been sold off and the ex-master distiller is working in beer. It looked like the end of the road.

A new era for Karuizawa’s whisky

Karuizawa Peal Geisha Sa1004 002 0542 16x9
Karuizawa, 38 year old Pearl Geisha

A new era for Karuizawa’s whisky

Despite appearances to the contrary, a reprieve was already in the works. Back in 2009, David Croll and Marcin Miller – founders of specialist Japanese whisky distributor Number One Drinks, which was handling single cask sales for Karuizawa – went to the distillery for a cask tasting. As they tell it, they tried 69 cask samples and would have bottled all but one. 

Understanding only then that the distillery was no longer in production, they offered to purchase it. Kirin rejected their bid immediately. Undeterred, the pair made a counter bid to acquire the Karuizawa inventory and after prolonged negotiations, Kirin accepted. In 2011, Number One Drinks became the sole owner of the last remaining stock – 364 casks in all – of mature Karuizawa whisky.

We have Number One Drinks to thank for introducing Karuizawa to the rest of the world. While Japan’s interest in whisky was waning in the 2010s, Europe was just waking up to it. Karuizawa casks were bottled and exported and their emergence on the global scene coincided with – and benefitted from – the boom in Japanese whisky, where premium brands like Hibiki and Yamazaki were starting to scoop awards and beat their Scottish rivals.

For present day connoisseurs, the flavour of Karuizawa whiskies has always been a draw. Alice Lascelles, drinks writer for the Financial Times, points to the Karuizawa 1983, 28-year-old Noh Cask No 7576, as a standout, praising its notes of “rain-flecked bonfires, dates and treacle, with a whiff of smoky lavender”. But you might have another favourite. Just as critical to the appeal has been provenance, this is not just whisky, it’s whisky from a lost distillery. Like spirits from other silent distilleries, such as Port Ellen and Brora in Scotland, it has taken on cult status. 

Even in operation, Karuizawa’s capacity was limited (at best it produced 150,000 litres per year, which is five times smaller than newer distilleries such as Glengyle or Arran). But its permanent closure now ensures every bottle of single malt is limited edition – and all but guarantees auction prices to match. That is, on the rare occasion when bottles of Karuizawa come up for sale. With the last remaining casks now in private hands, new releases are a scarce commodity and worth raising a glass to indeed.


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