Smoked salmon brand Bleiker's Smokehouse owed more than £2.8m when it went into administration earlier this year before being acquired, new documents show.
The Leeming Bar-based business has now reportedly been bought by US-based Seriously Fish following a troubled period in which the loss of a major supermarket contract spurred its collapsed and a fraud investigation was launched into the company over concerns about country of origin claims on some of the brand's products.
The National Food Crime Unit confirmed to Business Live that the investigation - which has so far prompted one arrest - is still ongoing. Administrators at FRP confirmed that in late March Bleiker's largest supermarket customer, accounting for 50% of its sales, abruptly pulled its products from the shelves and cancelled orders over doubts about provenance of Bleiker's foods.
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Directors attempted to sell the company but despite detailed discussions with some interested parties, no deal was reached and administrators were called in. The firm's 84 staff were left some £106,000 short in pay arrears, pension contributions and holiday pay while Clydesdale Bank is expected to suffer a shortfall of £458,000. Bleiker's also owed hundreds of thousands to other creditors including seafood suppliers.
Writing in a report on the progress of the administration, FRP explained the sequence of events: "The company had experienced volatile trading conditions during 2020 and 2021 as a result of the impact of Covid on its customer base. It had managed to maintain profitable trading during most of this period and serviced its debt facilities.
"The statutory accounts for the year to April 30, 2021 showed turnover of £14m and a profit after tax of £296k. However, increasing raw materials prices which could not be passed on in full to customers, combined with difficulties sourcing temporary labour in the busy pre-Christmas period in 2021 resulted in poor trading performance during the final quarter of 2021.
"This in turn placed pressure on the company's cash position. Management carried out a review of the business and identified some changes to the company's cost base which, alongside sales price increases from customers, it believed would allow the company to trade on with the continued support of its funder.
"In late March 2022, the company's biggest customer (approx. 50% of sales) notified the company of concerns regarding the provenance of goods supplied and withdrew its products from sale in its stores, ceasing all orders. Despite an ongoing dialogue and a number of audits being undertaken by the customer and its agents, no resolution could be reached. A confidential settlement was eventually agreed with the customer on April 26, 2022 which ended the relationship.
"The sudden loss of this customer's business, combined with the already weakened financial position meant the company was no longer viable."
Bleiker's Smokehouse, under the new ownership, was contacted for comment.
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