Administrators called in to Wheatley Hill-based Rock Farm Dairy
The future of 88 jobs is at risk after a County Durham dairy called in administrators.
Wheatley Hill-based Rock Farm Dairy processes and bottles milk and cream for distribution across the North East.
But despite an annual turnover of £17m, the company, which handles 150,000 litres of milk a day, has suffered from increasing costs and squeezed margins.
PricewaterhouseCoopers said it hoped to find another milk processor to take on the company's facilities.
A spokesman said: "The appointment is a result of disappointing trading performance due to a significant rise in bad debts from customers, combined with an increasing cost base, and difficulties passing price increases on to customers."
He said the business had suspended trading with immediate effect.
He said: "We are working to secure a third party interested in a tolling arrangement, where the company facilities would be used for a fee payable to the administrators.
"Employees have been told their position will depend on the result of urgent talks with potential tolling partners during tomorrow and potentially over the weekend."
The company has been trading for more than 100 years from the same site.
In 2009, the dairy received an £80,000 grant from regional development agency One North East to help fund an expansion programme following the demise of the Dairy Farmers of Britain group.