The confectionery group, which owns the Creme Egg and Green & Black's organic chocolate brands, is under pressure from rising raw material costs.

The company said its decision to limit its participation in aggressive seasonal Easter discounting had hit its market share.

The group, which plans to spin off its North American drinks unit next month, said its global confectionery sales rose 7 per cent in the first quarter of 2008, but British sweet sales rose just 3 per cent.

Chief Executive Todd Stitzer said hefty price discounts of chocolate eggs by rivals over Easter had trimmed UK growth by 2 percentage points and an early Easter in March helped trim another point off British growth.

"Overall, Britain had a very good first quarter, but there were a number of one-off factors with an early Easter leading to a two to three week shorter selling period and price discounting," said Mr Stitzer.

Analysts had expected stronger growth of around 8 per cent after a very strong second half in 2007.

The flooding of the group's Sheffield factory, where Bassett's Liquorice Allsorts and Trebor mints are made, in last summer's downpours continues to impact on its share of the UK candy market.

The Hillsborough plant in Sheffield also makes perennial children's favourites Black Jacks and Fruit Salads.

The company saw its biggest growth in confectionery sales in the Americas, led by an 8 per cent rise in Halls cough sweets in the US during the cold winter months.

Mr Stitzer said the economic outlook for 2008 remained challenging, although the group has seen a strong performance in emerging markets such as India and Russia.

The group's North American Dr Pepper drinks unit saw revenue growth of just 3 per cent in the first-quarter and only 1 per cent on a like-for-like basis in a very competitive market which analysts said raised some questions for its performance over the year.

The company is demerging the drinks business, which also makes 7Up, through a listing on the New York Stock Exchange in May.

It attempted to sell the operation last year, but changed its mind after the credit crunch hit the ability of potential buyers to raise finance.

The move will leave the remaining Cadbury operation as the world's largest confectionery business, with number one or number two positions in 20 of the world's 50 largest confectionery markets.

Cadbury has launched a new UK advert featuring racing airport trucks in a bid to emulate the success of last year's £6m Dairy Milk advertising campaign featuring a gorilla drumming to the Phil Collins track In the Air Tonight, which became a cult hit.

Cadbury held to previous guidance that it expects confectionery sales to grow at the upper end of its 4-6 per cent target range in 2008 after a 7 per cent rise in 2007 and expects to see operating margin progress in 2008.

The group expects to see beverage revenue growth of between 3 and 5 per cent in 2008, after revenues rose 4 per cent in 2007 and modestly lower underlying margins in 2008.

Under the terms of the demerger, shareholders with 100 Cadbury Schweppes shares will receive 64 shares in Cadbury and 12 in Dr Pepper.

Cadbury issued the first-quarter trading update ahead of a court meeting and general meeting for shareholders to approve the demerger.