The loss of the contract, which was worth around £50–60M, ended a 30-year trading relationship with the retailer.
Icelandic Seachill is a supplier of prawn cocktails, party food and fish cakes to the UK retail market. It also owns Saucy Fish Co.
The company confirmed that the deli site was expected to close at the end of March 2017 and the remaining products would be relocated to its coated site location, also in Grimsby.
A spokesman at Icelandic Seachill said: “We entered into collective consultations with Unite the Union and elected representatives of our monthly paid employees.
“This milestone has now been reached and the consultations have now broadly concluded.
“Although any job losses are regrettable, we can report that the final number of redundancies will be significantly lower than originally envisaged, falling from 175 to 86.
“There is a possibility of this figure reducing further as employees take opportunities at our chilled site, however this will have an impact on the number of agency staff employed.”
Individual consultations continuing
While the collective consultations have concluded, the company said that individual consultations would continue until the end of August. The outcome of the selection process would be communicated to individuals directly.
“We appreciate this is a difficult and sensitive time for our employees, and our priority as a business is to support those affected by M&S’s decision,” the spokesman said.
“Icelandic Seachill remain in good shape with strong and continuing partnerships with our other valued customers.”
M&S decided to transfer all of its business with Icelandic Seachill to three alternative suppliers, in June 2016.
M&S confirmed to Foodmanufacture.co.uk in June that production of its coated fish products was relocating to Grimsby-based Five Star, owned by 2 Sisters Food Group.
Fish en croute meals manufacturing was going to Freshcook in Spalding, while prawn cocktail product would be transferred to Greencore in Northampton.
Last year, Young’s Seafood announced a possible 900 redundancies at its Fraserburg and Spey Valley following a loss of a major contract with Sainsbury.
In September 2015, Young’s revealed it was to cut 650 jobs and retain 250 after reviewing its earlier plans.