Thai Union proposes sale or closure of Scottish smoked salmon firm
Thai Union Group subsidiary Européenne de la Mer has proposed the sale or closure of Dingwall, Scotland-based business The Edinburgh Salmon Company Ltd (ESCo), in light of the firm’s continued heavy losses.
Market conditions and industry trends have dealt ESCo a challenging hand as of late, with ongoing reviews, significant investment, and structural changes doing little to alleviate the strain for the firm, according to Européenne de la Mer. In 2017, ESCo suffered several critical contract losses, among them a salmon supply contract with U.K.-based sandwich and salad chain Prêt a Manger. Grimsby’s Young’s Seafood scored the contract, and now supplies the sandwich-maker with salmon for five lines.
As for ESCo, the company is actively pursuing “all viable divestment opportunities in an attempt to avoid, reduce, and/or mitigate the potential impacts upon [ESCo’s] valued employees,” it said.
“Our employees at ESCo are our primary consideration. They were informed of the situation this morning. We are now informing our customers and suppliers about the proposal, as well as community leaders and government representatives,” Européenne de la Mer, a leading European producer of chilled seafood, explained in a press release.
ESCo is currently in the process of appointing elected workplace representatives to consider next steps. Once the representatives are in place, a 45-day collective consultation period will commence “to further consider the proposal and alternatives to it,” Européenne said.
“If, we are unable to find a viable alternative to the proposed closure we will then carry out individual consultations with at risk employees. We would like to thank our employees at ESCo and across our wider business for their support, commitment and professionalism at this difficult time,” the company added.
Moving forward, Thai Union and Européenne intend to honor existing arrangements in place with ESCo’s valued customers as well as help them to “smoothly transition, if need be, to alternative supply arrangements going forward.”
Thai Union acquired ESCo through a deal it brokered with Merinvest, the parent company of MerAlliance in France, in 2014. In September 2017, Thai Union said it would back ESCo for the “foreseeable future” despite the company incurring losses of more than EUR 7 million (USD 8.1 million) in 2016, The Press and Journal reported. Those losses were, in part, due to high fish prices that ESCo didn’t want to pass onto its customers, the company said in its report at the time.
“The company had a difficult year, with a large loss resulting from the very high price of fish, which it was unable to recover from its customers,” according to the 2016 year-end ESCo report released last year.
“The ultimate parent undertaking, Thai Union Group Public Company Limited, will provide adequate resources to allow the company to continue in operational existence for the foreseeable future,” the report said.
ESCo is a salmon farming company founded in 1988, and specializes in the sale of smoked and cooked salmon products; roasted and poached salmon and trouts; terrines, appetizers, and smoked blinis; and salmon portions and steaks.