Allied Domecq has a number of distilleries in Scotland

Allied is currently the world's second-largest drinks company and makes Ballantines, Teachers, Laphroig, Glendronach, Scapa and Tormore whisky.

Any takeover would raise industry concerns in Scotland over what it would mean for the company's Scottish bases.

Shares in Allied Domecq rose on Tuesday as takeover talks were confirmed.

Speculation has surrounded Allied Domecq - which also makes Courvoisier cognac, Beefeater gin and Malibu coconut rum - since early 2005.

Pernod Ricard, the world's third-largest drinks firm, is said to be working on a bid with US-based Fortune Brands.

'Early stage'

A spokesman for the company told BBC Scotland's news website that talks have been taking place.

He said: "The board confirms that it is in discussions with Pernod Ricard, which is working with Fortune Brands, regarding a potential offer for Allied Domecq by Pernod Ricard.

"These discussions are at an early stage and there can be no certainty that an offer will ultimately be forthcoming.

"A further announcement will be made in due course."

Allied Domecq has a number of distilleries in the north east of Scotland.

Pernod - famous for the aniseed-flavoured drink of the same name, as well as Chivas Regal scotch, Jameson Irish whiskey and Jacob's Creek Australian wine - is keen to expand.

In 2000, it carved up US-based Seagram's drinks business with rival Diageo, with a third going to Pernod and two-thirds to Diageo.