Cadbury Schweppes, the confectionery and soft drinks group, sought to calm investor fears today ahead of its forthcoming demerger after admitting it had lost market share over the crucial Easter trading period.

Shares of the company fell by 16.5p to 562p in morning trading this after it revealed that its share of the UK chocolate market had fallen by 80 basis points in the first quarter after it decided not to get involved in heavy discounting by retailers.

But the group insisted that, while the "economic outlook in 2008 is challenging", overall trading in the quarter had been strong, and it was encouraged by the performance of both parts of the company.

The company also announced the successful syndication of the $4.4 billion of debt and loans taken out against its demerged American soft drinks arm, to be called Dr Pepper Snapple Group (DPSG).

Despite the credit crunch, strong demand allowed the group to reduce the bridge loan by raising the term loan from $1.9 billion to $2.2 billion.

Some 35 banks joined the sydicate for the term loan and $500 million revolving credit facility. The term loan will carry an interest rate of 4.75 per cent, somewhat better than expected.

The group's confectionery arm, which will be called Cadbury post-demerger, achieved revenue growth of 7 per cent, on the back of strong gum sales and a good performance in emerging markets.

Todd Stitzer, chief executive of Cadbury Schweppes, said the division had managed to recover increased commodity costs by implementing price increases.

He reiterated its previous guidance of full-year revenue growth "towards the upper end of our 4-6 per cent goal range", with improved margins and cost savings in line with expectations.

In Britain, confectionery sales grew by 3 per cent in the quarter, despite a loss of 80 basis points of chocolate market share over Easter as Cadbury limited its participation in aggressive seasonal discounting.

It said it had implemented price increases to recover higher input costs and launched new advertising for Cadbury Dairy Milk at the end of March.

Mr Stitzer said he was "comfortable" with the group's market position in chocolate. "We walked away from 1-2 per cent of revenue because we chose not to participate in low-margin promotions on shell eggs with multiple retailers."

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