Nestl pensioners in York today said that philanthropist Joseph Rowntree would be "turning in his grave" over the company's decision to axe a £10 Christmas voucher scheme.

Bosses have confirmed that, from next year, Nestl will no longer give retired staff a voucher they can spend in high street shops.

The announcement, which affects hundreds of former staff at Nestl Rowntree in York, is blamed on the gift's falling value and a poor redemption rate.

Former staff received a letter from Adrian Holmes, Nestl's head of group pensions in Croydon, informing them of the decision.

This year, pensioners were given a £25 voucher in "acknowledgement of the fact that the company is discontinuing the practice".

The letter states: "Whilst this (the voucher) has been appreciated by many pensioners, its value has clearly fallen and we have now reached the stage where every year hundreds of vouchers, worth several thousand pounds, are not redeemed.

"Against this background it is difficult to justify continuing this arrangement."

Nestl has also given pensioners who do not want to redeem the voucher the option of donating its value to charity.

But some former employees have still branded the company a "Scrooge", and said it was the start of the breakdown of the social structure put in place by Rowntree founder Joseph Rowntree more than a century ago.

A Nestl spokeswoman today said that the company was still committed to York and to its pensioners.

Val Wafnioski, a Nestl pensioner, said he was disgusted at the company's actions. "What is the company going to do with the money saved? This seems like just another cost-cutting exercise," he said.

"It is lamentable that an international company of the size and profitability of Nestl treats its ex-employees in such a manner."

Neil Moore, who represents Nestl pensioners in York, said many would be unhappy with the company's decision.

"There are some 14,000 pensioners (across the country). In York, they are unhappy at this. It could be taken as a dismantling of the paternal service started by Rowntree," he said.

"I wouldn't be surprised if Rowntree was turning in his grave."

George Tutill, GMB union representative at Nestl, said: "We feel that this is disappointing and it is the wrong kind of move."

A Nestl spokeswoman said: "Nestl has made an enormous effort to the community and pensioners in York in the 14 years since acquisition took place.

"We feel that this is the sensible option. But we have a commitment to the York community and to the York pensioners."

Updated: 12:29 Monday, December 16, 2002