Increasing prices have negatively affected consumer demand for seafood, as significant reductions in fishing quotas lead to double-digit changes.inflation, as stated by Hilton Foods.
A leading food packaging company listed on the FTSE 250, which collaborates with retailers such as Tesco to provide their own-brand items, informed investors on Wednesday that it is exploring various types of fish and working on 'product reformulation' due to declining demand.
UK food costs have increased faster than the general inflation rate, reaching 4.9 per cent in July and predicted by the Institute of Grocery Distribution to rise to 5.1 per cent in August.
This has been attributed to heatwaves, droughts, and floods affecting crop production in the UK and other regions, along with issues in global supply chains.
Nevertheless, the rise in minimum wage and additional employer national insurance contributions this year have increased the cost of labor for UK farmers and supermarkets, resulting in higher food prices at the checkout.
The latest information from the Office for National Statistics regarding white fish fillet prices is only available until January of this year, yet the data indicates a significant rise in consumer expenses over the past five years.
A kilogram of white fish fillet cost £15.60 in September 2020, whereas it was £20.59 in January – a rise of approximately 32 per cent.
Hilton Foods also mentioned the restrictions on catching white fish, which were implemented due to concerns about the health of fish populations.
Analysts from Shore Capital reported that Hilton experienced a "significant increase in UK seafood prices" of approximately 60% in the first half of the year, resulting in a "moderate to high single-digit drop" in demand.
Hilton Foods stated, "Reduced demand for UK seafood has been caused by quota reductions, resulting in substantial increases in raw material costs."
We are addressing the situation through product adjustments and the addition of different species, along with strategic stock acquisitions to ensure supply remains available for the rest of the year.
A better showing in the meat sector contributed to a 0.2 per cent increase in total UK and Ireland regional volumes, although overall revenues jumped 12.4 per cent on a reported basis to £797.3 million.
The group recorded a total statutory profit before tax of £24.3 million, representing a 5.3 per cent decline compared to the previous year. This decrease was partly due to Hilton facing currency challenges and disruptions in the shipment of smoked salmon to the US through its Foppen division.
Hilton Foods' chief executive Steve Murrells CBE stated: 'The first half of 2025 was influenced by a solid showing in our retail meat and convenience sectors.
Although we have encountered market-related pressures and certain operational difficulties in the seafood sector, we have reacted swiftly and still maintain a solid foundation for future expansion. I would like to express my gratitude to all our committed teams for their ongoing dedication.
Hilton Foods shares dropped 12.3 percent to 722p during initial trading, indicating they have declined by a quarter in value since the beginning of the year.