A tense annual meeting earlier this month saw Allied Domecq chairman, Gerry Robinson, heckled and the company criticised on a range of issues. Unilever too has faced criticism - for taking 'holidays' from contributing to its pension fund. As Mr Robinson pointed out to his shareholders, however, the picture for both companies is brighter than it appears.

Allied Domecq and Unilever, respective giants of the global drinks and food industries, have found themselves with something in common in recent weeks. Like other UK companies, they have been hit with higher than expected pension costs that have cut earnings growth.

Earlier this month, Allied revealed it would have to inject up to £40m into its pension fund. The company had been expecting to take a £16m pensions-related hit, but the depressed state of the market has pushed the figure up.

Now Unilever, which makes Magnum ice cream and Marmite spread amongst others, has joined Allied with a £2.2 billion hole in its pension fund that will wipe 5% off 2003 earnings.

The companies are among the highest profile victims of the pensions shortfall in the UK. Many companies have shifted to defined contribution schemes, although Unilever has no plans to do so. By European standards, however, the UK has been active in trying to head off longer term pension problems.

However, both Allied and Unilever insist they are in confident mood. Allied has pointed out that business is good across almost all of its interests. It says it is strong in US spirits, its global wine business is on target and its food chains - including Baskin Robins and Dunkin' Donuts - report good sales.

At Unilever, 2002 net profits before exceptional items and amortisation of goodwill are up 13% and the company expects to meet its double-digit earnings growth target this year. Unilever continues to focus on its most successful brands and has a strong record of delivering on its targets. Its shares climbed on the news.

The criticism leveled at Allied Domecq and at Unilever's management about its pension fund muddies the bigger picture. In reality, the companies face problems that are largely not of their own making and both are well positioned despite the global economic downturn.