By MARK McLAUGHLIN
Edinburgh Evening News
2 February 2010
FOR 200 years, Cockburn's of Leith has kept Edinburgh's dining tables stocked with some of the world's finest wines.
What successive wars and the great depression of the 1930s could not achieve, the recession and supermarkets' competition has done.
The wine merchant, which served Sir Walter Scott, Charles Dickens and King George IV, has been forced into administration.
It's not the first wine seller to hit the rocks in recent months - and the fear in the industry is that it will not be the last.
At the opposite end of the market, Threshers, Haddows and Wine Rack - which had around 30 stores in the Capital - have been driven to the wall by the same pressures.
While Cockburn's may have been hit by a substantial drop in orders from the major banks, it is our love of the supermarket special offers which are hitting most independent sellers hardest.
The future for many of them looks bleak, according to Steve Mudie, president of the Scottish Licensed Trade Association.
"We have seen the value of alcohol reduced by about two-thirds as multi-retailers (such as supermarkets) are now telling the producers what they're willing to pay for their product," he says.
"When the multi-retailers put the product out at a loss - and are then able to reclaim the VAT on that loss - the small independent retailer just can't compete."
The supermarkets also receive GBP 20 to GBP 30 million a year in "marketing support" from alcohol producers - to guarantee space on the shelves - allowing them to cut prices further.
"The upshot of all of this is consumers have a lower expectation of how much alcohol should cost," says Mr Mudie. "So, if you have a bottle of port that's worth about GBP 8 at market value, consumers will only expect to pay GBP 5 for it.
"The supermarkets claim their offers are all good for consumer choice, but ultimately it will be bad for consumer choice.
"Supermarkets already account for 67 per cent of the alcohol market in the UK and as their dominance increases, the prices will start to rise again with no-one around to challenge them.
"Within two years, the days of cheap supermarket alcohol may be over."
These are tough times for independent traders, says Kenneth Vannan, of Edinburgh-based wine and spirit merchant Villeneuve Wines.
"We have been very lucky in that we had an OK winter. Our only target was to do better than the previous winter and we achieved that, but it's been tough," he says.
"The closure of the First Quench [owner of Threshers, Haddows and Wine Rack] stores led to an increase in sales in two-thirds of our stores.
"All of their old stores are now up for grabs for individuals. Whether they are viable is a different matter, but if they sell interesting products, then there's no reason why they will not prosper."
Newington-based wine merchant WoodWinters' managing director Douglas Wood says it is still possible for independents to prosper. "When someone buys a bottle of wine, we give them more than just a till receipt," he says.
"We e-mail them tasting details, serving suggestions, plus a little bit of information about the region where their wine was produced, so you're adding extra value."
Will Lyons, wine critic for The Reader's Digest and The Wall Street Journal, called the closure of Cockburn's "terribly sad news".
He added: "But it's not surprising. We have seen one of the most difficult trading periods on record for the independent sector. Fortunately, Edinburgh still has a thriving independent wine scene.
"Cockburn's is such a great name, with a rich history, that I would be very surprised if there wasn't significant interest in acquiring the Cockburn's brand."
HEART OF THE WINE TRADE
LEITH was, historically, at the heart of Edinburgh's wine trade, which developed out of the "Auld Alliance".
As well as pledging Scotland and France to support one another militarily against England, the alliance gave Scottish merchants the chance to select the finest of Bordeaux's wines for export.
Cockburn's of Leith was founded by Robert Cockburn in 1796, and before its demise was the oldest surviving wine merchants in Scotland.
The Cockburn's were a well-known family - Robert's brother Henry was the legal and literary figure Lord Cockburn.
The firm shipped orders to customers all over Britain, including Sir Walter Scott and Charles Dickens - on one occasion Sir Walter Scott ordered 350 dozen bottles of wine and 36 dozen of spirits.
The company was awarded a Royal Warrant after supplying wines to King George IV for a state banquet.
In 1993, Cockburn's merged with Edinburgh's first wine warehouse at Devon Place, and in 1998 merged again with JE Hogg of Cumberland Street. It was a meeting of two of the city's best-known independent wine merchants, although Hogg's, founded in 1948, was a relative whipper-snapper.
At the time, managing director of Cockburn's, Peter Gray, predicted that increasing pressure from off-licence chains and supermarkets would spell trouble for independent merchants. He said: "It has all the makings of a disaster for the independents and if they are to survive, they will have to look at joining forces to fend off such competition."
In 2004, after a buyout, the company moved to Abbey Lane, where it remained until closing.
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