The Mad Butcher Group has sold its sausage company to Tegel Foods.

Mad Butcher chief executive Mike Morton said the sale, unconditional from November 1, was for an undisclosed sum but included the manufacturing plant, capable of producing 80 tonnes of sausages a week.

"Basically, the sausage company was limited in it's growth potential," Mr Morton said. "We had constraints on the factory reaching its full capability. It needs a capital investment to get it to the next level."

A supply agreement had been reached "at a price that's suitable to both parties" but Mr Morton said Tegel would be looking to grow the business.

He said the recession had not affected the company. "If anything, it's helped our business...people have voted with their feet and we've continued double-digit growth."

The company was about to open three new stores and was looking at other opportunities as sites have become more readily available in the economic downturn, he said.

The 30 to 35 factory staff would be offered re-employment with Tegel, he said.

A Tegel spokesperson could not be reached this afternoon.