Shizuoka Private Cask bottling in 700ml bottles, which was scheduled to be discontinued, has been officially decided to continuation, but the bottling cost will be raised significantly.

The “Shizuoka Private Cask issue,” which has been a hot topic on SNS and the Internet for some time, has finally come to an end. On September 1, 2023, Gaiaflow Corporation, the operator of the Shizuoka Distillery, announced on its website and via e-mail that it had made some erroneous information regarding the “Shizuoka Private Cask” and that it had made some changes to its services. Private Cask” will no longer be bottled in 700ml bottles and will continue to exist.

This site has not mentioned the “Shizuoka Private Cask issue” until now, but this article will go back to the announcement of the bottling cost revision in April of this year to explain the series of contents and the latest situation.

1. what is “Shizuoka Private Cask”?

First, let me explain what a “Shizuoka Private Cask” is before I get into this issue.

A “private cask” is a cask of whisky (or spirits aged less than 3 years) that is purchased in a cask prior to bottling and then bottled and delivered to the buyer after a specified period of aging has elapsed.

.

The purchase price of a private cask and the maturation period varies depending on the manufacturer’s (distillery’s) terms and conditions, the size of the cask, and other factors.
Some buyers are fans of the distiller (distillery) and buy with a sense of support, while others buy for investment purposes to identify a distiller (distillery) with high growth potential.

Many Japanese distilleries sell private casks privately, but Shizuoka Distillery has been selling private casks to the public since shortly after it started operation.

For more information about Shizuoka Private Casks, please refer to the manufacturer’s page below.

https://shizuoka-distillery.jp/products/private-cask/privatecask2024-octave/

2. notice of bottling cost revision (4/3/2023)

Let us explain this “Shizuoka Private Cask issue” in chronological order.

On April 3, 2023, Shizuoka Distillery sent an email to the cask owner, “Notification of Bottling Cost Revision.
The price of bottles, caps, cap seals, labels, and tubes required for bottling have become difficult to maintain due to the rising cost of materials, and will be revised as follows.

[Details of price changes
Cost name: Bottling fee
Fee: 450 yen (excluding tax) → 550 yen (excluding tax)
Date of change: From the application on May 1

We are not sure if the 100 yen per bottle price increase is appropriate or not, but we understand that it is difficult to maintain the bottling unit price due to soaring prices caused by various international situations.
At this point, I believe that few cask owners would have objected.

3. Notice of discontinuation of 700ml bottles (6/26/2023)

About three months after the announcement of the bottling cost revision, we received an even more important announcement.

On June 26, 2023, Shizuoka Distillery sent an email to cask owners.

In summary, the contents of the email were as follows

• Shizuoka Distillery has decided to discontinue all 700ml bottles and switch to 500ml bottles.
• The decision was made to solve the conflicting issues of increasing the number of bottles sold while maintaining the policy of “introducing whisky with a long maturation period.
• The reality is that the number of bottles delivered to customers has been lower than expected because smaller casks generally have a larger angel’s share and a higher probability of leakage accidents.
• The purchase price of 500ml bottles, which are a special order product, is significantly higher than the purchase price of 700ml bottles, which are a general purpose product.
• The Blended M, which will be shipped this summer, will be the last 700 ml bottle product for the time being. Thereafter, the company plans to ship all products in 500ml bottles, at least for the next few years.
• The fact is that we have no choice but to abandon the 700ml bottle because the cost, including the packaging, would go up even more.
• Since there are many requests for 700ml bottles, the revival of 700ml bottles is an issue to be considered in the future.
• The owner of the private cask will give priority to the sale of the first single malt in 500ml bottles, scheduled for release in July, as a way of expressing our apology for this situation.

The contents of this e-mail, which arrived suddenly, have already been communicated to the cask owners as a decision.

As for the bottle capacity, I believe this was stipulated in the terms and conditions of the private cask purchase. We do not know how this change will be legally interpreted, but we must say that it is a unilateral change for the convenience of the manufacturer.

In parallel, the Gaiaflow website has posted an article titled “Shizuoka Distillery’s Bottles to Change to 500ml.

http://www.gaiaflow.co.jp/blog/praivate-cask/16161″]

3-1. why didn’t they make it optional?

I understand the logic of Shizuoka Distillery’s claim that they are changing to 500ml bottles “in order to deliver as many bottles as possible,” but why not apply this to private casks as well? However, I felt that there was no need to apply this to private casks as well.

Furthermore, it was explained that the 500ml bottle is a special-order item and the cost of purchasing it is higher than the 700ml bottle, but that increased cost is passed on to the cask owner who pays the bottling fee. I wonder if the choice between 700ml and 500ml should have been made.

The company apparently considered the possibility of combining the two, but explained, “We are aware of the desire to include 700ml bottles, but the cost, including packaging, would rise even more, so we have no choice but to abandon the idea.

3-2. increased bottling costs

Bottling at 500 ml requires more bottles than bottling at 700 ml. The increase in the number of bottles means an increase in bottling costs. This is an unexpected expense.

For example, in the case of octavo casks (50L), Shizuoka Distillery expects to bottle 42 bottles at 500ml.

Three years after casking, the amount of original alcohol in the cask would be 500ml x 42 bottles = 21,000ml (21L). (The octave angel’s share is 15% per year, which means that more than half of the whiskey in the cask will be volatile.)

(1) Cost when bottled at 700ml

If bottled at 700ml, assuming the amount of original whiskey in the cask is 21,000ml, the cost is 21,000ml ÷ 700ml = 30 bottles.
Since the bottling cost per bottle was 550 yen, the bottling cost would be 30 bottles x 550 yen = 16,500 yen.

(2) Cost when bottled at 500ml

In the case of bottling at 700ml, assuming that the amount of original liquor in the cask is 21,000ml, the cost is 21,000ml ÷ 500ml = 42 bottles.
Since the bottling cost per bottle was 550 yen, the bottling cost would be 42 bottles x 550 yen = 23,100 yen.

If the bottling is switched from 700ml bottles to 500ml bottles, the difference of approximately 6,600 yen will be the additional cost to the cask owner.

3-3. confusion between official and cask owner

The email from Shizuoka Distillery explains that they are planning to bottle their official products in 500ml bottles in the future. I think it is perfectly fine for the distillery to change its policy for future releases of official products to 500ml bottles, but shouldn’t they have thought differently about applying that change to bottlings of “private cask” owners who have already purchased the rights to the distillery?

I think the confusion between the official product policy change and the private cask policy change may be the problem in this case.

3-4. reaction of cask owners

There seemed to be a lot of opinions about this alteration on social networking sites, the Internet, and Youtube.
Here is what Mr. Mossan, a cask owner of Shizuoka Private Cask and owner of the Youtube channel “Mossan’s Highball Club,” had to say about the issue.

What did you think?

He carefully explains the problems with the changes, his expectations for the future, and his message to the distillery in about 20 minutes. The content is very easy to understand.
I felt that it was a wonderful message that showed consideration and love for the distillery while raising the issues.

4. notice of misinformation and partial change of service content (2023/9/1)

On September 1, 2023, about two months after the announcement of the discontinuation of 700ml bottles, we suddenly received another e-mail.

The email, titled “Notice of some erroneous information and partial change of service content regarding ‘Shizuoka Private Cask’,” contained the following information in summary

• We have confirmed that incorrect information about Shizuoka Private Cask has been circulated on SNS and other social networking sites.
• We will disclose correct information to the public so as not to cause unnecessary concern.
• We have been consulting with our lawyers as necessary to prevent legal issues from arising.
• We will continue to comply with the instructions of our lawyers and work on proper and transparent corporate management.

More information on the correct information can be found on the GaiaFlow website at.

http://www.gaiaflow.co.jp/blog/managing-director/16395″]

We will pick out the important details from this notice and explain them.

4-1. Explanation regarding bottling costs

In response to the incorrect information that the company is trying to make a profit by raising the price of x bottling costs, the company explains, “x Bottling costs are the amount equivalent to the actual cost of materials plus labor, and the price increase is in line with the increase in each cost.” The price increase is in line with the increase in each cost.

Explanation regarding bottle capacity

In response to the misinformation that “x The company is trying to cover up for the fact that the amount of the original bottles is decreasing by increasing the number of bottles by reducing the bottle capacity,” the company explained, “x We have often received requests from cask owners to increase the number of bottles even if the bottles are smaller in volume. The company explained.

4-3. continued existence of 700ml bottles and increased bottling costs

There was no explanation as to whether or not this was a conclusion reached in response to various opinions on social networking sites and the Internet, and it was stated that the 700ml bottles would be officially decided to continue.

We will officially continue bottling in 700ml bottles, which we had planned to discontinue. The cost of bottling in the new 700ml bottle will be 770 yen per bottle. (The cost per volume is the same as for bottling in 500ml bottles.)

While we are happy to announce that the 700ml bottle will survive, the bottling cost is now 770 yen per bottle.
This is a considerable increase compared to the original amount.

0Bottling cost transition

Bottle capacity	700ml bottle	500ml bottle
～to the end of April 2023	450 yen	–
～From – end of June, 2023	550 yen	–
From July 1, 2023	–	550 yen
From October 1, 2023	770 yen	550 yen

In May of this year, the bottling cost for 700ml bottles was revised due to the rising cost of bottling materials, changing from 450 yen to 550 yen.
The bottle capacity was subsequently changed from 700ml to 500ml, but the bottling cost remains unchanged at 550 yen. The company explained that the cost has increased because the bottles are custom-made.

The bottling cost for the 700-ml bottle, however, has increased by 220 yen to 770 yen from the 550 yen used until the end of June of this year. The announcement did not explain this point.

Although the decision was made to keep the 700ml bottles, the bottling cost will increase significantly, and it remains to be seen if this will be the end of the problem.

5. Lastly

I can understand Shizuoka Distillery’s argument about the “Shizuoka Private Cask issue,” as I suspect that the background of the issue was the severe situation in the operation of whiskey distilleries.
It is true that all distilleries are facing the same problem in whiskey production due to the recent world situation and the rising prices of various materials.

However, there may have been some aspects of private cask regulations (specifications) that should and should not be changed. I think it was necessary to examine a little more whether or not it was acceptable to the cask owners who had already purchased the casks.

We whiskey lovers must support the production of higher quality and better tasting whiskey, consume it on a daily basis, and watch over it, while understanding the various issues and threats surrounding distilleries.

Distillers also need to be considerate of and stand by the enthusiasts and consumers who support them, as well as private cask owners.

As a matter of fact, I am also a cask owner who purchases “Shizuoka Private Cask”. I have many thoughts on this matter, but I would like to ask you to work on it so that the brand value of Shizuoka whisky as a high quality Japanese whisky will not be lowered, and I would like you to continue to work on it so that lovers can purchase and enjoy “Shizuoka Private Cask” with peace of mind. We hope that you will continue to work to ensure that connoisseurs can purchase and enjoy Shizuoka Private Cask with peace of mind.