In a trading statement to coincide with its Annual General Meeting, the UK-based spirits and wines combine, Allied Domecq, said it continued to make good progress, with trading in line with expectations, but that year-end earnings would only be on a par with last year.

"The business is performing well, in spite of challenging conditions, and is meeting our expectations," said Allied's CEO, Philip Bowman. "Stronger than anticipated growth in the US, Asia Pacific and Latin America has offset the industry destock in Spain. Our underlying European business remains strong, with increases in market share in critical categories."

The company said that it would suffer a £25m (US$41.13m) fall in profits in Spain as a result of destocking and was also expecting a £40m charge on its pension fund.

Allied posted pre-tax profits of £480m for the year to the end of August 2002, a 6% rise from the previous year, on turnover of £3.334 billion.