Tuesday, December 16, 2014

Suntory Announces Major Price Hikes from April 2015

Post by Stefan Van Eycken, Tokyo

Yesterday, Suntory officially confirmed rumours that had been circulating for a while, i.e. that it would raise prices for 6 of its major brands (Hibiki, Yamazaki, Hakushu, Macallan, Balvenie and Laphroaig).

The price hikes will affect 39 expressions – across the aforementioned 6 brands (constituting 8% of Suntory Liquor’s total sales). Cheap whiskies, like Torys or the iconic Kakubin, will not be affected.

The last time Suntory raised prices for its domestic whiskies was in September 2008 (a less dramatic increase than this time round). Since then, the cost of raw materials (barley and corn) has gone up with 60-70%, according to Suntory, and this has made the price increases inevitable.

The prices of Suntory’s domestic whiskies will be raised by 20-25%. The three Scotch brands in its portfolio will see a price increase between 17 and 25% - also because of increased demand for these brands in new markets worldwide.

The graph below shows the actual price difference for the major expressions (prices without tax):
Suntory also announced a new permanent addition to its Hibiki range, a NAS expression called ‘Japanese Harmony’ (bottled at 43%). This will be available in Japan from March 10, 2015 and later in the year in selected markets abroad. In Japan, it will be priced at 4,000 yen. It is unclear whether the price of this expression will also be adjusted from April 2015 onwards.
It will be interesting to see whether other major players on the Japanese whisky scene follow suit. It is clear that this move is not an impulsive one, however. Suntory has been laying the groundwork for this for a few years now, by phasing out lower age statements and replacing them with NAS expressions and/or by adding a NAS version to the bottom of a range (as with the newly announced Hibiki, for example). This way, people whose wallets are less inclined to adapt to the price hikes have a ‘substitute’. Whether the consumer will respond in the way that Suntory anticipates remains to be seen, especially if the government goes through with its plan to further increase the consumption tax (which used to be 5% until last year) from 8% to 10% - while salaries remain what they are…

18 comments:

Powerlifter said...

Suntory's story stinks to high heaven. The largest expenses in whisky production are the leasing costs for the warehouses where the casks are housed (particularly for product aged 10+ years) followed by the fuel needed for distillation. The price of barley should not have an appreciable impact on costs, particularly considering purchasing costs of grains are based on futures contracts, which evens out fluctuations in the market.

If I'm wrong, you can all point it out to me in a year or two when the price of barley goes down and Suntory cuts its prices commensurately.

Mark said...

Will this affect prices worldwide or just on the Japanese Domestic Market?

Joshua Anderson said...

Suntory does not own Balvenie. Balvenie is owned by William Grant and Sons...

Gats said...

isn't Macallan owned by Edrington?
http://edrington.com/our-brands/macallan?lda=1


Why are those prices on this list?

Thanks, Gats

rosuoter said...

I believe Suntory has exclusive agency rights to import those Scottish brands mentioned on the list (Macallan etc) in the Japanese market.

For the details, please look at http://www.suntory.com/business/beam_sun/japan.html

In the meantime, is there any difference between Yamazaki NAS launched in 2012 and Yamazaki Distiller's Reserve 2014?

Stefan Van Eycken said...

Thanks rosuoter... Some people are clearly projecting things on the post. Nowhere does it say that Suntory owns Balvenie or Macallan. They have - as you wrote - exclusive distribution rights.
Re you second point: there are differences in batch (as there always are - to my taste buds, the earlier batches were better than subsequent ones) but the Yamazaki NAS and the Yamazaki Distillers's Edition are the same thing. It had been available for a while in Japan and,when Suntory decides to export it too, they figured they had to come up with something that had a nicer ring to it than "NAS".

rosuoter said...

Steven, many thanks for the clarifying! I had the same gut feeling on that point though))))

Tony said...

So will this affect the US prices of Laphroaig as well? If so I might go grab a 10 year since it's on sale at my local Costcos at the moment. Thanks.

singlemaltpls said...

Hi Stefan! Do you happen to know when Suntory will release new stocks of whiskey?

Cavalier said...

The Yamazaki 18 year old has disappeared from European stores - and where it is available is now way above previous prices. A taste of things to come?

Anonymous said...

Just got back from the duty free at KIX, the "limited edition" Hibiki bottles are going for 21 yo ¥50,000, 17 yo ¥20,000 12 yo ¥10,000. I was able to talk to some liquor store owners over there and they said that Suntory was limiting sales of their 17 yo and 21 yo. They also said that they were no longer receiving the 12 yo and instead getting the Japanese Harmony.

Anonymous said...

Going to Osaka this month and keen to get some limited edition hibiki. Any suggestion where can I find them as departmental store has none?

Ashwin Shanker said...

agree....I just picked up a Suntory Limited Edition 18 year old for ¥50,000 and Hibiki 12 year LED for ¥10,000 in Narita airport last week. even the airport seemed to have very little stocks and I picked up the last 2 bottles on this category.

arROw said...

I was at Haneda last July 2015. The saleslady at the DutyFree said all their outlets were out of stock as far as Japanese whisky was concerned. They were offering Japanese sake instead. I went home empty handed.

Wolfy said...

A ridiculous Japanese 'fever' if you ask me. With people / flippers charging 3-4x more than the list price. Seems like Suntory is on the band wagon, laser printing their bottles and calling it a limited edition. Lol. With the same juice inside yet charging 2-3x more. Smart way to squeeze more out of the wallet for practically no additional cost.

Bud said...

just got myself Yamazaki 18 yo limited edition for Y50,000 and Hibiki 17 Limited ed for Y20,000 AT KIX on November 9, 2015. converted to USD$563.

Bud

Anonymous said...

Yamazaki 18 ltd is still Y50,000 at KIX airport, just saw it 10 mins ago

Joel See said...

I just bought Yamazaki 18 Limited addition from HND airport today at ¥50,000. Left 2 bottles, which me n my friend bought them all.
I was there a month ago and there were no Yamazaki or Hibiki at all. Guess I was 'lucky' this time round.