Allied Domecq has announced an increase in advertising spending to counteract diminishing sales of key brands.

Brands such as Courvoisier cognac and Ballantine's whisky have suffered a decline in sales in the September to February period.

'We recognise that we have some short term challenges,' confirmed chief executive Philip Bowman. 'These include lower volume performances than we had planned from some of our core brands, particularly in the US.'

Allied Domecq has raised the amount it spends on advertising by more than 27 per cent; spending $25m promoting the Stolichnaya vodka campaign alone.

In a trading statement, Allied said its performance in America had been poor, undermined by a poor response to the economic slowdown: 'We have recognised that even prior to 11 September, we were slow to respond to more difficult economic indicators.'

Allied's comments came as it published pre-tax profits of £251m for the six months to the end of February, 6 per cent up on the same period a year before. In the UK, Teacher's and Tia Maria were key performers.

The company says it has taken steps to boost performance, including improving its supply chain operation at a cost of £8m. Allied said its earnings will be helped by the £560m purchase of Malibu. Details: www.allieddomecq.com