Bidders for collapsed Cockburns get more time as buy-out talk dismissed

Published on Monday 1 February 2010 21:27

THE deadline for bids for one of Scotland's oldest wine merchants, Cockburns of Leith, which collapsed last week, has been extended to tomorrow amid strong interest from potential suitors.

Administrators were called in to Cockburns last Friday in the wake of the recession and growing competition from the supermarkets.

A deadline for bids had previously been set for yesterday evening but Ernst & Young, which has taken control of the merchant, said last night it has now been extended to midday tomorrow amid "plenty of interest".

However, a spokeswoman for Ernst & Young poured cold water on rumours that the former management team, led by managing director Ian Macphail, were poised to buy the firm in a pre-pack administration. She said the administrators had so far received no approaches from any members of the previous management, which also included Mark Tulloch and Morag Idan.

Cockburns was founded in 1796 by Robert Cockburn, brother of the legal and literary luminary Lord Cockburn. As one of Scotland's first wine importers, it famously sold 350 dozen bottles of wine and 36 dozen bottles of spirits to Sir Walter Scott. Other customers included Charles Dickens. In 1822 Cockburns was awarded a Royal Warrant after supplying the wine for a state banquet in honour of King George IV.

Last week administrators made five of the merchant's seven staff redundant. They are now inviting bids for the stock and the brand but there are no plans to continue trading the business.

Joint administrator Colin Dempster said last week: "The group has been impacted by the recent economic downturn, which has unfortunately led to a declining order book and the directors concluding that the business can no longer continue to trade."

This is the second time Cockburns has fallen into administration.

In 2004 it was saved in a management buy-out, after which the firm was relocated from Haymarket to Morningside. In 2006, Macphail bought out his business partner David Forbes.

Rumours have been circulating in the Scottish drinks industry for weeks about the health of the firm but fellow wine merchants in Edinburgh said last week that no-one expected it to collapse. Competitors attributed its problems to aggressive pricing by the supermarkets, which account for more than two-thirds of off-trade sales, and a slump in both corporate and restaurant orders.

Kenneth Vannan of Villeneuve Wines in Edinburgh said many wine merchants were still feeling the pinch even though the UK had technically left recession.

"It could be a few years before we climb out of it," Vannan said.