CADBURY Schweppes, the world's largest confectioner, said yesterday that its United States soft-drink brands had lost market share after prices were raised to cover soaring raw-material expenses.

Cadbury fell as much as 2.9 percent in London trading. The company reported that US beverage revenue rose 1 percent in the first quarter excluding acquisitions and currency shifts, trailing the 7 percent increase for the confectionery division.

Shareholders were voting yesterday on the spin-off of the Dr Pepper Snapple Group, which is scheduled for May. After the split, demanded by activist investor Nelson Peltz last year, Cadbury will focus on confectionery. The company said it would meet annual sales and profit goals after sales of Trident gum gained in the first quarter.

"We are disappointed by the 1 percent growth rate and the news of modest share decline," Investec Securities analyst Martin Deboo said. "The timing of this statement relative to the listing of the business cannot be considered helpful." He said the Dr Pepper unit was the only major US soft-drink business to gain market share last year.

Carbonated

Increases in the cost of oil, aluminum for cans and fructose corn syrup led Cadbury to raise beverage prices by 4 percent in the US in the first quarter, more than the 2 percent increase by larger rivals Coca-Cola and PepsiCo, Chief Financial Officer Ken Hanna said.

US market share declined "modestly," Cadbury said, adding that sales of non-carbonated drinks, such as Snapple iced tea, were "strong."

Cadbury was down 14 pence, or 2.4 percent, to 564.5 pence at 11am local time, the second-biggest drop in the UK benchmark FTSE 100 Index, which was up 0.7 percent.

Before yesterday, the shares had declined 6.8 percent this year, more than the 2.7 percent retreat by Nestle, the maker of KitKat chocolate bars.

Cadbury stock has declined 22 percent from its peak in May, before credit markets seized and derailed plans to sell the US soda unit.

The confectioner is not boosting margins quickly enough, Peltz, who holds a 4.5 percent stake along with the gulf emirate of Qatar, said last year.

The investor has pressed for changes at companies including burger chain Wendy's and threatened to become "more active" if Cadbury didn't return money to investors.

Cadbury said yesterday that loans it arranged in March before the spin-off have been syndicated to 35 banks. The company borrowed US$4.4 billion, US$1.9 billion of which will be repaid in five years.

The annual interest rate on the five-year loan will be about 4.75 percent, according to Cadbury.

UK confectionery sales rose 3 percent in the quarter, held back by 2 percent because Cadbury curbed discounting on Easter eggs compared with rivals. Revenue was restrained by a further 1 percent because Easter was two weeks earlier than in 2007, Hanna said.

Cocoa, from which chocolate is made, has gained about 28 percent in the past year.