Canterbury falls victim to Jamie's war on school sausage rolls

Jamie Oliver's quest to improve school canteens claimed a victim yesterday when the sausage roll and hamburger maker Canterbury Foods collapsed into administration.

Most of the debt-laden group was sold off piecemeal to its executive directors after its bankers withdrew their support on Monday, PricewaterhouseCoopers said.

After a swingeing profits warning last summer, when the company breached its banking covenants, Canterbury Foods has been hit by schools clamping down on feeding children unhealthy pastry products. The television celebrity chef Jamie Oliver has campaigned against unhealthy foods, forcing certain schools to rethink their menus.

Last month, Canterbury bemoaned the lacklustre school sausage roll market as it warned that its shareholders risked being wiped out unless it could restructure its debts. The group's shares have fallen from 26p in the summer to less than 1p.

Canterbury sold its troubled meat products arm in December for £4.5m, but half the purchase price reflected existing stock in the business not leaving much for its bankers. Yesterday it suspended its shares from AIM, saying that its "refinancing proposal has not been accepted. As a consequence, the directors are seeking the appointment of an administrator."

It has been a lingering demise for Canterbury Foods, which has been languishing under a £20m debt mountain since it bought a burger manufacturer six years ago. The acquisition was doomed as three years later Canterbury lost its main contract to supply hamburgers to Burger King.

PwC has sold three of Canterbury's four remaining manufacturing sites to a management team headed by Paul Ainsworth, the former chief executive. No purchase price was disclosed but the sale safeguarded 200 jobs.

Ian Green, at PwC, said: "The company has been suffering cash-flow difficulties for some months, and its management has been attempting to reduce external debt and restructure the business to preserve its ongoing viability."

He is hopeful of selling the remaining cooked meats business, which employs 32 people at a site at Yate, near Bristol.

Mr Ainsworth, who used to work for the sandwich maker Hazelwoods Foods, joined Canterbury shortly after it lost the Burger King contract. He was unavailable for comment yesterday. His new vehicle, Medway Foods, has taken control of sites at the Isle of Sheppey, Whistable and Bridgend.

Canterbury had been loss-making for five years. As recently as 2000, it was the country's biggest producer of meat and pastry products. But it has struggled to cope with rising meat prices and selling price deflation this year.