One of Britain's biggest sandwich suppliers has collapsed into administration, in another indication of the crisis facing the food manufacturing industry.

Freshway Foods makes around 300,000 sandwiches a week for major supermarkets including Asda. It also supplies schools, High Street bakers and motorway service stations, as well as producing bulk fillings for sandwich bars and restaurants.

Administrators BDO Stoy Hayward have been appointed at the Wolverhampton-based firm, which employs more than 300 people.

Asda, which described Freshway as a major supplier, said it did not expect sandwich shortages as it had planned for the possibility of the company's demise.

It is believed a pre-pack administration may have been prepared, but no one from Freshway or BDO Stoy Hayward was available to comment.

The UK's £5.25 billion sandwich industry, which employs more than 300,000 people, has been squeezed by supermarkets demanding ever-lower prices.

At the same time, costs have risen due to the weak pound, with imported fillings becoming more expensive.