Cluny Fish bites back in dispute over kiln and factory’s demise

By JOHN ROBERTSON

THE SIC is in dispute with the former operators of the Shetland Smokehouse after they shut the council-owned Skeld factory and removed its smoking kiln by cutting a hole in the wall.

Smokehouse director Louis Paterson and his staff were only prevented from loading the valuable industrial equipment on a lorry to relocate south after local people and the council intervened. The police were put on standby during the incident in May but Mr Paterson agreed to leave the equipment until its ownership is established.

The closure by the Buckie-based parent company Cluny Fish has angered people in the West Side, prompting renewed accusations that had always intended stripping out the assets and keeping the Smokehouse company’s prestigious name and customer base.

Yesterday Mr Paterson denied he had such motives and responded by accusing some former workers and others of making the factory fail and of subjecting Bulgarian workers to racism. He said the factory had been losing money “hand over foot” and he had decided to close and empty it swiftly due to previous break-ins and thefts and a fear that it might be “ransacked”.

Last year he had to defend himself against claims that the factory was being run down deliberately and its workforce dumped. The allegations followed the sacking of long-serving workers which led to others quitting in support.

“We’ve been painted awful black,” he told The Shetland Times.

The community has been left to pick up the pieces with an empty factory that so far nobody appears to want. Shetland West councillor Gary Robinson has organised a public meeting for 5.30pm on Monday evening in the Skeld Hall to sound out opinion and find a possible way forward. He said there were wider concerns in the community because of the loss of the salmon factory at Sand too, which has left the West Side with little industry.

An advert in June offering the smokehouse to let found no takers, according to SIC acting asset and properties manager Alan Rolfe. The only response was an inquiry about the old building on the site.

Mr Robinson said: “I think at this stage we’re really open to basically anything but our prime consideration would be to get something in there that was going to help the economy of the community rather than just to be a store or something like that. We would far rather see a business operating in there and employing local folk.”

The shock closure in May came just two weeks after Mr Paterson had announced “ambitious plans” to establish the Smokehouse range in 10 countries. Two months previously he said refurbishment of the factory was near completion and a recruitment drive was about to start, which he said showed commitment to the future of the business “and the wider Shetland community”.

The company was offered public grant support for the improvements, including an SIC grant of £25,000 in December to improve the factory floor and £19,162 from HIE Shetland for equipment in October.

Cluny Fish continues to use the Shetland Smokehouse brand although the website clearly requires updating to explain that none of its products are now smoked in Shetland. Mr Paterson said salmon was still sourced from here and he expressed surprise at out-of-date information still being on the website.

One former employee said this week there had been high hopes when Cluny Fish saved the Smokehouse business in 2006 but its relations with staff went rapidly downhill, culminating in the sacking of some older workers, the stopping of some production and removal of factory equipment to Buckie. She said: “It was the callous, horrible way they did it – it’s left the community with a very bitter taste in their mouth.”

According to Mr Paterson, Cluny Fish could not get people to work for it at Skeld and some of the locals were not prepared to change their ways to move forward with the company. “One of the biggest problems was productivity and labour. In the modern world you’ve got to be very efficient, fit and lean to compete.”
He said he eventually saw why Shetland Catch had given up on the business. “If we had carried on the way they did before it would have gone bust again.”

In a bid to plug the labour gap he said two Bulgarian women had been sent up from Buckie last year and provided with a caravan to stay in at the factory. He claimed the pair had been subjected to “a bit of racism” and someone reported the company to the SIC for not having planning permission for the caravan.

“We got the feeling we were never accepted in Skeld, to be quite honest.”

Answering accusations that he had just been after the customer base, he said many of the customers had not been profitable anyway, which he said may have been another one of the reasons why Shetland Catch got out.

The SIC said this week it accepts Mr Paterson has genuine grounds for believing his company owns the kiln, which was essentially the centrepiece of the fish-smoking factory. Head of legal services Jan Riise said it should never have been listed as an asset for the liquidator to sell after Shetland Catch pulled the plug on the company two years ago. He said: “It seems to have been a genuine mistake somewhere along the line.”

However, he said the council is concerned about the cost of the damage that was done to the kiln and to the building when it was removed through the wall, which is still being assessed but is estimated in the tens of thousands of pounds.

Mr Riise said: “We’re pursuing a claim through our insurers. In the event that the council’s position is not vindicated through a claims process we would certainly be considering court action to ensure that there was no loss sustained to the public purse.”

Mr Paterson was adamant yesterday he had bought the kiln and the factory’s cold store among the assets listed for The Shetland Smokehouse Ltd by the liquidator, Aberdeen-based Meston Reid & Co. “Rather than cause a fuss, we just left it up there,” he said. “We would never have tried to take it away if it didn’t belong to us.”

He is now pursuing the matter with Meston Reid, including the question of compensation.

Meston Reid’s insolvency senior, Graham Smith, who has worked on the case, said yesterday the problem was not its fault and might be traced back to the time of the previous sale to Shetland Catch in 2004. He said: “The council think they own it and we’ve asked them to prove it.”

Mr Rolfe said the kiln will not be refitted unless the next tenant wants to smoke fish.

The Shetland Smokehouse Ltd business is owned outright by Mr Paterson and his wife Karen, who own all the share capital. Its last published accounts state a net book value for the company of £50,289 at the end of January.