One of the UK's oldest producers of Stilton has gone into administration after being hit by cashflow problems in the economic downturn.

Quenby Hall Dairy, which lays claim to being 'the home of Stilton', is one of only six producers to be allowed to produce the cheese under the EU's PDO scheme. It entered into administration on 15 April.

Quenby Hall blamed its demise on difficult market and trading conditions, which it said had been exacerbated by over-expansion. "The general economic outlook, the sharp and continuing rise in milk prices and the difficulty in achieving suitable gross margins all contributed to the decision," the company said in a statement.

Simon Plant, a partner at administrators SFP, added Quenby Hall had suffered from "a lack of cashflow" at a time when it was in the process of expanding its facilities. Given the company's heritage and prestige, SFP was hopeful a buyer would be found. Although production had ceased, an SFP spokesman said none of the 40 staff members had been made redundant, pending negotiations with "interested parties".

Any purchaser would have to reapply for a licence from the Stilton Cheesemakers Association, said Nigel White, the association's secretary. "It's sad when a business like that goes under because they worked very hard to build the business and their niche within the market."

According to Quenby Hall, Stilton was invented when, in the 1700s, Quenby Hall housekeeper Elizabeth Scarborough started making cheese and selling it on local markets.

The hall ceased production for the first time in the 1800s, but resumed in 2005 when owner Freddie de Lisle launched Quenby Hall Dairy. Since then, it has won several awards, including Supreme Champion Cheese at the 2009 British Cheese Awards.

As The Grocer went to press, no buyer had been announced. Quenby Hall's estate, farm and events businesses were continuing to ­operate ­profitably, said de Lisle.

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