The term itself is worth pausing on: a fish palace, despite its grand title, was not a place of ceremony but a practical industrial facility, typically used in the eighteenth and nineteenth centuries for the processing and curing of fish, most often pilchard or herring. The word palace likely derives from the Italian "palazzetto", brought into coastal Irish usage through the pilchard fishery trade that once connected southwest Ireland with Mediterranean markets.

The pilchard industry along the Cork and Kerry coastlines was a significant economic concern from the seventeenth century onward, drawing investment from local landowners and merchants who constructed these curing stations at sheltered coastal points. Fish would be landed, pressed, and salted on site, with the extracted oil collected separately for use in lamps and leather-working. Bere Island, positioned at the mouth of Bantry Bay, would have offered both the necessary access to fishing grounds and the kind of sheltered landing that such operations required. Rerrin, at the eastern end of the island, sits close to the narrow strait that separates Bere Island from the mainland at Castletownbere.