School milk scheme supplier Cool Milk has thrown a lifeline to middle-market dairy company Rock Farm Dairy, which went into administration last week.

The company said it would provide financial backing through its chairman, Jon Thornes, and resurrect the supplier as UK Dairy Sales Ltd. The deal would save jobs and ensure customers got milk, it said.

Rock Farm entered administration on 1 March. Its administrators, PwC, said the company had suffered from disappointing trading due to “bad debts” from customers, rising costs and difficulties in passing price rises on to customers.

Rock Farm’s demise comes after four companies belonging to Farmright Group, the supplier of Dairystix milk pouches, went into administration last month.

NFU chief dairy adviser Rob Newbery said the administrations showed how competitive middle-market dairy had become. “There are real problems with selling milk into the middle market at less than the cost of production,” he said.

Rock Farm Dairy had a turnover of £17m a year, and employed 88 staff.