2 Sisters said the fish firm had undertaken a full strategic review of its business and concluded that the operation was not sustainable in its current form for the long-term. Five Star employs 390 staff at the site.
“We are having ongoing discussions with our customers and with other local manufacturers to ensure we explore the full range of options available to us,” said 2 Sisters.
‘Unable to reverse the situation’
“However, the site is heavily loss-making and despite major investment in recent years, we are unable to reverse the situation.”
The consultation with staff and customers, which included upmarket retailer Marks & Spencer (M&S), will decide the future of the site and what means for them.
“It is important to emphasise that no final decisions have yet been made, as the consultation process has only just begun,” added 2 Sisters.
Heavy investment
Talks on the future of the Five Star site followed a period of heavy investment by 2 Sisters, since it bought the business out of administration in 2010.
In April last year, 2 Sisters invested £5m into the frozen fish firm, with plans to extend and upgrade the Grimsby factory.
The investment was a result of the firm winning a contract to supply M&S with coated fish products in August 2016, edging out competitor Icelandic Seachill. This followed a £6m investment in the same year, which created up to 70 new jobs at the company.
A spokesman for M&S said: “We’ve been working closely with Five Star Fish and will move our coated fish business to another M&S supplier.”
Meanwhile, 2 Sisters Food Group’s parent company Boparan Holdings has battled plunging comparative operating profit in its second financial quarter, but cut net debt compared to the previous quarter, it said in a results statement.