Inside the Japanese market

Wines & Vines, August, 1999 by Kevin Sinclair

Bulk Imports

However, connoisseurs would likely shudder if they could witness Japan's wine imports. Most is in bulk. The cheapest is likely to enter the country in big plastic bags stuffed into containers. Much of it comes from cheap source producers in Bulgaria, Romania, Argentina and Chile or anywhere else on the planet. Mixed in a huge tank with 5% Japanese grape juice, it can then legally be sold with a Japanese label: Sapporo, Suntory, Asahi.

Total Japanese Wine Market

UNITS 000 9 LITER C/S      1997       1998       VAR.     % INCREASE

Domestic Wine             11,844     16,883     5,039         43%
Imported Wine             12,668     27,688    15,020        119%
Total Wine Market         24,512     44,571    20,059         82%

Imported/Still Wine Market by Country of Origin

COUNTRY                    1997        1998      VAR.     % INCREASE

France                     4,886     11,545     6,659        136%
Italy                      2,114      5,078     2,964        140%
Chile                        616      3,066     2,450        398%
USA                        1,058      2,610     1,552        147%
Germany                    1,603      1,909       306         19%
Spain                        378      1,144       766        203%
Others                       846      2,353     1,507        178%
Total                     11,501     27,705    16,204        141%

Source: Customs Bureau

Sandra Shoji is one of the most respected wine educators and analysts in Japan. She casts a cynical eye over the industry. She said that corporate executives are going down the price ladder to mid-market, buying medium-priced Mondavi and Penfold labels for business entertainment, and shying away from awesomely-priced Bordeaux.

The princess of the business world is the young Japanese working woman. They are fueling the continuing wine boom. They love Italian food and love eating it with Italian wines. Men drink sake or whisky if they have money, cheaper shochu spirits if they are hard up. Cocktails are usually shochu-based. They make fortunes for restaurants and bars.

Shoji contends that some top Japanese wine executives don't really like wine. She recalls: "A few years ago I was at a tasting given by Hugh Johnson and was enjoying some soba (buckwheat noodles) with a glass of red. The president of Suntory wine division reprimanded me. 'You can't eat Japanese food with wine,' he said. I replied: 'Watch me'."

There are still wine snobs scattered about, mostly males in their mid-30s who have some money hidden from wives. They stop off on the way home in expensive wine bars. Their motto remains: "If it ain't French, if it ain't red, it ain't wine."

But change is coming. Next year, import liquor laws will change, making it simpler and easier to import wine. Already, convenience stores (Lawsons, 7-11) are hustling to get licenses. They'll be heading inexorably downwards to ensure market share.

Nick Collins, of the Japanese office of the old British House of Berry and Rudd, says 1998 import figures were up 119%. But retailer demand increased only 100%. Naturally, this lead to a worrying overstock situation, and early this year, distributors were scurrying to get rid of excess stock. In turn, this depressed demand from abroad. But what's happening is not a drop in domestic demand, says Collins, rather a short term stock correction.