A NORWEGIAN salmon farm company has blamed the Covid-19 pandemic for its decision to quit Scotland and concentrate its operations in Canada and Norway placing uncertainty over 200 jobs.

Grieg Seafood Shetland has announced a "strategic review" of its operations on the islands and says it is "aiming to sell when the timing is right".

The firm has 219 employees - operates 17 active seawater licences, one freshwater facility and one harvesting plant.

The Norwegian company said the Covid-19 pandemic had "severely" hit all of its markets and deeply hit their bottom line.

Grieg Seafood has previously stated it will cease operations at its five farms on Skye after the current harvest is completed.

Andrew Fry of Grieg Seafood asid: "The decision to divest from Shetland, and Skye for that matter, was reached after careful consideration.

"The unfortunate reality is that the Covid-19 pandemic has seriously impacted global salmon markets which has affected the company earnings.

"Grieg Seafood ASA cannot provide the investment needed for growth across all regions within the current climate.

"Therefore, the decision to sell the operations in Scotland is to re-focus investment in Canada and Norway where there is a greater opportunity for long-term sustainable growth.

"We understand this creates uncertainty for our talented employees, but we would stress that salmon farming should be expected to continue to play a significant role in the Shetland economy going forward including employment opportunities.

"Our workforce possesses lots of accumulated experience and skill which will be desirable to any potential buyer."

In September Grieg Seafood said it would end operations on its five farms on the Isle of Skye in Scotland, due to the" long distance" between the island and its main operations on Shetland.

"The distance is too great to operate the two areas as one unit, and the Skye operation is too small to be operated as a separate unit," it said.

It said the decision was expedited due to an incident of "high mortality" at three of the Skye farms between late July and early-September 2020, mainly caused by abnormal levels of jellyfish.

And in May, Grant Cumming, the managing director of Grieg Seafood Shetland admitted it was “not where we want to be” with regards to sea lice levels and escaping fish.

In August, high sea lice levels and low market prices contributed to losses of £1.0 per kilo for Grieg Seafood Shetland in the second quarter of this year.

But harvest volume was 3,770 tonnes, up 14% compared to Q2 2019, and total revenue was up 2% against the same period in 2019 due to higher volume.

The firm said sea lice level in Shetland remained high, with the corresponding intensity in mechanical treatments having an impact on survival rates, and driving up costs per kilo.

Sea lice have posed a major problem across Scotland’s farmed salmon industry, with parasites from open net farms earlier this year blamed for a slump in wild salmon numbers to their lowest level since records began.

The parasites, which thrive in cramped cages and feed on the mucus, skin and blood of fish, result in salmon being virtually eaten alive.

The Shetland operation’s measures to improve the quality of young salmon known as smolts, including a new vaccination strategy, were providing positive results, said Grieg at the time and the survival rates of smolts transferred to sea this sea had increased significantly.

A fire at the Girlsta hatchery in June resulted in the death of 250,000 parr but the firm said it had not impacted on targeted harvest volume.

Grieg said it had been delaying some harvesting until 2021 in the expectation of prices improving.

A new set of recommendations were issued by the Scottish Government to address the interactions between the farmed and wild salmon sectors in May.

Salmon farming had been identified as one of 12 pressures on populations of wild salmon.

One of the recommendations published is that Scotland’s finfish aquaculture regulatory regime should be reformed to ensure that it is fit for purpose, “comparable with the highest international and domestic regulatory standards”.

Another recommendation is that the Scottish Government should “holistically assess and review the approach to sea lice treatment, including access to medicines and the use of controls in their use, to deliver an evidence-based approach to sea lice control, whilst ensuring the protection of the wider environment and wild and farmed fish health and welfare”.

The report was created by the Salmon Interactions Working Group, which brings together salmon farmers, the wild fish sector and governmental bodies.

Grieg Seafood Shetland said at the time that 80 per cent of wild salmon stocks are on the east coast of Scotland.

“Numbers there have declined steeply and there are no salmon farms on the east coast,” it said in May.