The contract, which was worth around £50–£60M, has been ended after a 30-year trading relationship with the retailer.
This affects the coated, en croute and deli business, although the timing of the transfer of business is unknown, said the fish supplier.
Icelandic Seachill was founded in 1998 and is a supplier of prawn cocktails, party foods and fishcakes to the UK retail market. It also owns the Saucy Fish Co.
Simon Smith, chief executive officer at Icelandic Seachill, said: “We have been informed by M&S that they have chosen to give the contract for all their business with us to alternative suppliers.
‘Large number of roles may be at risk’
“This decision will have a huge impact on our business and the unfortunate reality is that a large number of roles may be at risk.”
He said that the company was currently reviewing all “practicable alternative scenarios” but it was “early days”.
“Our number one priority is to support those directly impacted by the decision that M&S have taken,” he said.
However, he stressed that the business was stable and remained in “good shape”.
M&S told FoodManufacture.co.uk that it had taken the decision to move fish, fish en croute and prawn cocktail products from Icelandic Seachill in Grimsby to three, existing M&S suppliers.
Production of its coated fish products was relocating to Grimsby-based Five Star, owned by 2 Sisters Food Group. Fish en croute meals manufacture was going to Freshcook in Spalding, while prawn cocktail product would be transferred to Greencore in Northampton.
Food supply chain
M&S said: “As we grow our food business, improving the quality and capacity in our food supply chain is an important part of our strategy.
“The decision to move products from Icelandic Seachill to three other suppliers is not one we have taken lightly. However, we believe the move will further improve our fish offer and deliver new and exciting products for our customers.”
Last year, Young’s Seafood announced a possible 900 redundancies at its plants at Fraserburgh and Spey Valley following the loss of a major contract with Sainsbury. The supermarket transferred its £100M/year smoked salmon and fresh salmon contracts away from Young’s to Norwegian seafood business Marine Harvest.
In September 2015, Young’s revealed that it was to cut 650 jobs and retain 250 after reviewing its earlier plans.