The merger, yet to be cleared by the competition authorities, will create a business with sales of pounds 1.3bn, 3,000 shops, 20,000 staff and 13 per cent of the market for take-home drinks, putting it second behind Tesco, which has an estimated 14 per cent share.
However, if "booze cruise" imports are factored in, the biggest market share is now held by the ferry companies and hypermarkets of Calais and the other Channel ports. These account for an estimated 15 per cent of the alcohol drunk at home in Britain.
The Victoria Wine-Thresher merger will produce savings of pounds 10m to pounds 20m a year and will increase the buying power of the combined group, which has seen market shares slowly whittled away by the supermarkets in the last decade.
The number of outlets licensed to sell alcohol has mushroomed from 32,000 in 1970 to 52,000 today. At the same time, the number of traditional off- licences has shrunk dramatically under the combined challenge of supermarkets and convenience shops. The move to Sunday, late-night and now 24-hour opening has further robbed the off-licence of its competitive edge.
Victoria Wine has 1,488 shops and also trades under the names of Victoria Wine Cellars, Haddows, Martha's Vineyard and The Firkin. Thresher's 1,470 shops trade as Wine Rack, Bottoms Up, Thresher Wine Shop, Drinks Cabin and Huttons.
Beyond these, the only chains of significance are Parisa (formerly the Greenall's Cellars Five chain), Unwin's, Oddbins, which aims to cater for wine buffs, and Majestic
The Thresher and Victoria Wine shops will continue to trade under their separate brands, unlike previous mergers in the industry. When Thresher took over Peter Dominic in 1991, the shops were rebranded under the Thresher name. When Victoria Wine bought the Augustus Barnett chain in 1993, the 550 branches it inherited were all changed to Victoria Wine outlets.
Despite consolidation, traditional off-licences have continued to lose market share to supermarkets and convenience stores. The big supermarkets, led by Tesco and Sainsbury's, command 65 per cent of the market against 31 per cent for specialised off-licences, and are growing their share at a rate of about 1 point a year.
Jerry Walton, the managing director of Thresher, said the merger would help protect choice on the high street. "The combination of the supermarket multiples and the booze cruise phenomenon has made life very tough. In itself this merger will not alter that, but it will give us enough clout to attack them and buy us some time while we develop other streams of income."
He is thinking in particular of expanded home delivery services - such as Thresher's existing business Drinks Direct - and home shopping for drink via direct mail, advertising and the Internet.
However, Clive Vaughan of Verdict Research warns that the combined group will face an uphill struggle to retain market share. "It is not a lot of fun being a specialised off-licence these days. This is a defensive move to keep the ship afloat for a bit longer but I think that long-term they are on a hiding to nothing."
Mr Vaughan points out that although there will be cost savings, the merger will do nothing for either Thresher or Victoria Wine's sales line. He says the average off-licence has about 1,000 square feet of space, whereas larger Asda and Tesco stores have 3,000 to 4,000 square feet for off-licence sales. "That means the traditional off-licences just don't have the space to offer the depth or range that you can find in a supermarket."
Mr Walton disputes this. He concedes it will be difficult to stock a wider range because of size, but he says that together the two chains sell 1,000 different wines and that the average Thresher shop offers 450 wines. "Typically, one of our Bottoms Up stores will have 650 wines on offer - not even a big Tesco stocks that many."
He also says the merged group will look at increasing its number of wine warehouses using the existing Martha's Vineyard format pioneered by Victoria Wine.
The combined business will not follow Parisa, which is now experimenting by putting cafes inside its Wine Cellar outlets.
Where Mr Vaughan and Mr Walton agree is that there would be little sense in referring the merger to the Monopolies and Mergers Commission. Although the combined chain would control more than 30 per cent of the country's traditional off-licences, Thresher argues that this is no longer a distinct market. "There are 52,000 off-licence outlets and we will have 3,000 of them," says Mr Walton. "Walk down any high street and there are myriad places to buy booze."
Mr Vaughan says that if the two chains are forced to remain independent the future is indeed bleak. Even if they merge there is another threat. Petrol station operators are lobbying to be treated in the same way as supermarkets who are allowed to sell drink and petrol on one site. "If the law is relaxed and alcohol starts being sold on the forecourt, that really will be a nail in the coffin of the off-licence," says Mr Vaughan.