Young's may help soften Five Star Fish jobs blow with M&S contract takeover
Could Young's Seafood take over the M&S contract if Five Star Fish folds?
By Grimsby Telegraph | Posted: 29 Mar 2018
Grimsby's Five Star Fish factory looks set to close with 390 jobs to go – but the hit to the town could be eased as Young’s Seafood prepares to step in and take over key work for high street giant M&S.
Staff at the huge site were dealt the hammer blow yesterday afternoon, with the whole facility now entering consultation as bosses call time on years of loss-making.
A total of £11 million has been invested in recent times, as it aimed to support the award of the prestige contract, won from near-neighbour Seachill.
Despite the efforts it is still in the red, and owner 2 Sisters Food Group has acted.
If proposals are passed it would be the biggest single loss since Birds Eye left Grimsby in 2005.
While severe softening of the situation is understood to be in the offing, it hasn’t been confirmed. Bosses at Ross House and M&S remain tight-lipped, though Humberbusiness.com understands the work, and a proportion of jobs, could head there.
First the formal consultation will run its course, with bosses keen to stress it remains a proposal.
A spokesman said: “Five Star Fish has undertaken a full strategic review of its business and has concluded its operation at Grimsby is not sustainable in its current form for the long-term.
“We are having on-going discussions with our customers and with other local manufacturers to ensure we explore the full range of options available to us. However, the site is heavily loss-making and despite major investment in recent years, we are unable to reverse the situation.
“Regrettably, we have now reached a stage where we have to enter into a period of consultation with colleagues and customers about the future of the site and what it might mean for them.
“It is important to emphasise that no final decisions have yet been made as the consultation process has only just begun.”
Five Star was the creation of John Fenty, major shareholder and director of Grimsby Town FC, with the purpose-built plant set up on Great Grimsby Business Park in the mid-Nineties.
It has changed hands three times since he sold up in 2004, having been expanded and bought out of administration in a turbulent decade.
Specialising in frozen, breaded, battered and further added value whitefish products, production facilities span 2,000 sq m, with a 5,000 pallet capacity coldstore.
Early last year it had taken on a further 70 staff to handle the M&S contract, which had been served by the town for a long time, initially by Coldwater then under the Icelandic Seachill brand.
Regarded as Britain’s biggest food manufacturer, and owned by the West Midlands-based Boparan family, 2 Sisters bought Five Star in 2010. It is understood food interests on Europarc and chicken facilities in Scunthorpe are buoyant, with further possibilities for employees there.
The business was rocked by a food standards scandal at a facility in West Bromwich last year, and last month, chief executive and regular Rich List entrant, Ranjit Boparan, stepped down from his role.
A spokesman for M&S, which has seen a drop in market share, said: “We’ve been working closely with Five Star Fish and will move our coated fish business to another M&S supplier.”
Young’s Seafood declined to comment, but the business has recently returned to form as a £500-million turnover business, overcoming a significant contract loss with Sainsbury’s, which actually saw work gains for Grimsby as it consolidated in the home town.
Industry and civic leaders are rallying. Grimsby MP Melanie Onn has written to M&S to urge them to stay in town, while the local authority will unleash its multi-agency approach to such hammer-blows, thankfully rare of late.
It comes after a buoyant week on Grimsby Fish Market, with strong supply aiding preparations for Good Friday – the single biggest day in the seafood calendar.
Simon Dwyer, representing cluster group Seafood Grimsby & Humber, said: “This announcement comes against a backdrop of recent good news stories within our seafood processing sector.
“We’ve met senior management from Five Star Fish. They’re planning contact with both local MPs and North East Lincolnshire Council.
“Additionally, Grimsby Institute Group and their partners, plan to engage with Five Star and the owners, to support the staff and assess skills and employability suitability.
“Grimsby remains a thriving hub for seafood processing with all major UK retailers and food service businesses buying their seafood from Grimsby. So we’re very hopeful that the M&S contract will be handled by another Grimsby based seafood processor. If so, it may mitigate the longer term impact of this announcement.”
Senior management at the site were locked in meetings for most of the early part of the week, with potential upset having first been brought to light after 2 Sisters Group’s latest results were published on Thursday. It had focused on poultry consolidation, with Scunthorpe set be a big winner, with that further mitigating losses.
A spokesperson for North East Lincolnshire Council said: “We are working with our key partners locally to help the staff find other employment, and we will be doing everything we can to support employees during this difficult time.
“We are determined to keep working in partnership with our private sector partners and future investors to bring new employment opportunities to the area.”
While many may have, or would be able to create capacity to handle the work, Young’s Seafood has the scale to take on a clearly challenging account with M&S. It has historically over-traded in seafood as those cautious with fish place their trust in a top British name and bastion of the high street. That reliance has waned though, and M&S has haemorrhaged market share of late, in volume and value, as Aldi and Lidl claw at the purse strings of hard-pressed UK shoppers.
Ms Onn said: “The closure of the Five Star Fish factory is a blow to Grimsby.
“I hope that a new home can be found for some of the contracts, particularly the Marks & Spencer one, as it is a vital source of jobs for our town.
“I welcome the comments from North East Lincolnshire Council that support will be given to the employees, and that further private sector investment in our town shall continue to be encouraged.
“I am writing to the Department for Work and Pensions to make sure workers are supported, and to M&S to encourage them to keep these jobs in the town.”
Overseas growth is a winner for coffee specialist as it takes top spot in Fast Track rankings