Good judgement is essential for maximising the potential of what is a well proven winning formula - combining confectionery with licensed characters.

Children love identifying with their favourite characters, but manufacturers must understand both in depth. "It is about knowing the characters, knowing kids and shoppers, and producing excellent products that give a character experience, value for money, and which taste good," says Martin Sutherland, sales and marketing director at licensed confectionery company Bon Bon Buddies.

A number of manufacturers insist that the market for character confectionery remains strong, with opportunities for growth coming from seasonal lines in particular.

Optimism for sound sales comes from a number of factors, including the growing demand by kids for character products and their ever increasing quality.

Yet the sector could be heading for trouble if threats of restrictions regarding advertising in this area become reality.

Having rejected Ofcom's three proposals on advertising to children, which are all based around time restrictions on ads, a coalition of industry bodies recently submitted a much harder proposal, including a ban on licensed cartoon characters and celebrities in advertisements that are targeted at children.

Under pressure from the health lobby, companies have been quick to emphasise that, while it is important that kids eat confectionery responsibly, their products should not be eaten in the same quantities as healthier foods. More often than not, this message is now written on the packaging, alongside health and nutrition advice.

Other companies, such as Haribo, say they will no longer advertise to children.

Easter and Christmas continue to be the key selling periods and the everyday market also offers a window of opportunity, according to children's confectionery manufacturer Kinnerton.

But Rachel Wyatt, divisional director for marketing at the company, says that there is a perceptible gap in the market for both girls and boys from 11 years into their teens, when character licensing gives way to pop, fashion and sports, and that companies needed to find suitable characters to plug this gap.

Meanwhile, Mr Lucky Bags says Hallowe'en has also become a notable date in the calendar.

To cash in on the increasing trend for Hallowe'en celebrations, the business has added a Scooby-Doo Party Pack to its range. Designed to be used at Hallowe'en parties, or as giveaways to trick or treaters, the pack contains 25 Hallowe'en-inspired sweets and toys, and retails at £3.99.n