A loss of business with Aldi is believed to be behind Smales鈥 proposed closure of one of its Hull factories, with 95 jobs at risk.
Sources in the industry have told Business Live that the 鈥渕ajor account鈥 Smales said it had lost in a statement released by the fish firm is the German supermarket giant.
Smales has been processing fish and seafood in Hull since 1937, but announced on Monday afternoon it was planning to close the chilled seafood section of its business.
If that closure goes ahead, 95 jobs are expected to be lost, and Smales鈥 factory in Witty Street would shut its doors.
A source told Business Live: 鈥淭he closure only affects their chilled food business and their frozen business continues positively.
鈥淭he chilled food market is always competitive and likely to be with a significant retailer.
鈥淚n that event business moves around regularly and is often subject to some sort of tender process. The business may well have been on tight margins anyway.
鈥淚 suspect that Smales have sensibly decided to focus on their good frozen business, particularly into fish & chip shops and smaller customers. That will be a very solid business.鈥
A separate source has also told Business Live that Aldi is the account lost by Smales.
Despite the planned closure of Smales鈥 chilled seafood section, its trading division 鈥 which specialises in the sale of frozen products to fish and chip shops nationally 鈥 remained unaffected.
The chilled seafood section of the business represents around 20 per cent of Smales鈥 annual turnover, meaning 拢70m of sales would be carried forward should it close.
A statement released by Smales on Monday said: 鈥淭he potential closure is due to the loss of business with a major account and vertical integration within the industry.聽
鈥淭he effect of this potential closure of the Chilled Seafood Division of F Smales & Son (Fish Merchants) Ltd may result in the loss of 95 jobs in Hull.
鈥淭his is very disappointing news for our loyal workforce.鈥
Just this May, Smales announced its sales in 2018 had passed the 拢93m mark 鈥 up from 拢92.4m the previous year.
The business however warned of future risks it could face.
Speaking at the time, Smales said: 鈥淭he company faces competition risk from other companies in the fish industry, and from fluctuating fish prices.
鈥淭he company needs to ensure that there is sufficient supply of raw material available to meet the demand of its customers.
鈥淭hese risks are faced by all companies in this industry.鈥
Smales said in its statement on Monday it would be making no further comment on the news at this stage.
Aldi was also approached for a comment, but declined to.
How to contact Phil Winter and Business Live
Business Live's Hull & East Yorkshire journalist is Phil Winter, also the business editor at the Hull Daily Mail and Hull Live.
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