UK-based ethnic food manufacturer S&A Foods has appointed administrators for the business after losing a contract to supply Asda.

Deloitte has been appointed with immediate effect and will work with the S&A Foods management team to review the company's operations in an attempt to try and secure a sale for part or all of the business.

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The firm employs 350 staff.

Perween Warsi, CEO of S&A Foods, said: "After 28 years, we deeply regret that Asda has decided to move the supply of chilled, ethnic ready meals to another business. We have worked desperately hard to try and save the business in a very short space of time, but, having explored many different options and rescue packages, we have no alternative but to appointment administrators.

"My heart goes out to all my colleagues at S&A Foods who have shown commitment and loyalty to me over many years, including in the last few days when they have been under immense emotional strain. My over-riding priority now is to do all I can to ensure that everyone affected receives as much support as possible."

She added that it was Asda's decision that was "the root cause of the situation we find ourselves in which in turn has led to the company going into administration".

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just-food understands S&A lost the tendered contract to Asda, of which Asda informed the firm of the beginning of the month. just-food also understands Asda had offered S&A options to continue supply over the next 12 months which S&A had rejected.

A spokesperson for Asda said: "We’re saddened to hear that S&A Foods has entered into administration. We had committed to supporting the business over the next 12 months, but as a result of financial difficulties unrelated to S&A’s relationship with Asda, we have been informed that production will cease with immediate effect. We are now working with alternative suppliers to ensure limited impact on our customers."

Last July S&A announced a restructuring of its business in a bid to reduce its operating costs, a move that saw 55 jobs axed.

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