Jobs at the firm’s sites in Grimsby, Lincolnshire and Fraserburgh, Aberdeenshire may be at risk, after an investigation into the business impact of the lost contract, FoodManufacture.co.uk can reveal.
Young’s boss Pete Ward said in a statement yesterday (June 23): “We confirm that, following a tendering process, Young’s has not retained the fresh salmon and smoked salmon processing contracts with Sainsbury’s.”
The ceo added: “We will be engaging with our employees and other stakeholders to discuss the implications for our business and how we can best position our company to achieve long term, sustainable growth in the current competitive market place.”
Young’s planned to explore new business opportunities, while continuing to focus serving customers and consumers with high quality, good value, fish and seafood.
‘Salmon sourcing credentials’
The key Sainsbury contract was lost because the retailer “wished to protect its Scottish salmon sourcing credentials and believed an alternative proposal could better achieve this objective”, the statement continued.
Sainsbury’s new supplier was able to offer the nation’s third biggest supermarket chain a dedicated production facility in the form of fish farms, it is understood.
Ward went on to underline the continuing importance of the retailer’s business. “Sainsbury’s remains an important customer for Young’s and we will continue to work together in other categories to deliver great fish and seafood products to Sainsbury’s customers.”
Up to 600 jobs could be lost
Up to 600 jobs could be lost between Young’s sites in Grimsby and Fraserburgh, this website understands. But no site is thought to be wholly dependent on the Sainsbury’s contract. Any job cuts would follow a review of the business and consultations with the workforce and other stakeholders, a Young’s spokeswoman told us.
How the news was announced
“We confirm that, following a tendering process, Young’s has not retained the fresh salmon and smoked salmon processing contracts with Sainsbury’s.”
- Pete Ward, ceo Young’s Seafood
The lost Sainsbury’s contract was understood to be worth about £100M/year to the seafood manufacturer. That compared with a total turnover of £600M/year. In April the firm posted full-year operating profit up by 24% to £25.2M.
A spokeswoman for Sainsbury said it had reviewed its Scottish salmon suppliers to ensure customers were offered the best products possible. “As a result of the supplier tender, we have given advance notice to Young’s Seafood that they will no longer pack and process salmon products for us,” she told FoodManufacture.co.uk.
“Marine Harvest, our Scottish farmed salmon supplier has acquired this business which will be carried out at its new factory in Rosyth, Scotland. However Young’s will continue to supply us with fish, including cod and haddock.”
Salmon contracts were expected to transfer from Young’s to Sainsbury’s new supplier from November 2015.
Read how Unite the union predicted 330 jobs were at risk at one of the manufacturer's Grimsby site and how Marine Harvest may have undercut its partner Young’s here.