Independent Fisheries is proposing to close its Christchurch plant with the loss of about 200 jobs, citing as factors intense competition from cheaper foreign-sourced product, as well as earthquake damage.
General manager Mark Allison says he told staff about the review at the plant on Friday morning.
The proposal to shut the Woolston processing facility will be finalised in November and Mr Allison says the company firm will be consulting staff and their representatives.
The plant , which has operated since 1967, produces crumbed and battered fish products.
Other parts of privately-owned Independent Fisheries Ltd will not be affected by the review.
Service and Food Worker's Union senior organiser Ian Hodgetts says while workers were shocked at the news, the company has been keeping them aware of its declining market position.
Mr Hodgetts says he expects the plant to be shut by Christmas.
The councillor representing the ward where the fish processing factory is likely to be shut down, says it is sad to see in the lead up to Christmas.
Yani Johanson says the council needs to ensure it is investing resources into the economic growth of areas hit hard by the quakes.
He says Woolston has always been a working class area and needs council and Government support for its ongoing development.