ALMOST 250 Nestl Rowntree workers in York are to lose their jobs, in a devastating blow to the city's biggest manufacturing employer.

The company said today the changes were needed in a fiercely competitive confectionery market, against a backdrop of rising energy and materials costs, and price pressures from retailers.

It said 234 jobs would go in York - 164 factory workers and 70 Nestl Rowntree head office staff - with another 41 going at a factory at Fawdon, in Tyneside.

Production of Munchies is to switch from York to Fawdon.

The company said it hoped the majority of redundancies would be achieved voluntarily.

Managing director Paul Grimwood said: "Today's proposed changes are about transforming our confectionery business so that it is fit for the future, and is best able to meet the demands and requirements of the market in the 21st century."

He said the focus was on reinvestment in the business.

He said: "We are responsible for making some of the best loved confectionery brands in the UK, such as KitKat, Smarties and Aero. Today's announcement is about building the long-term manufacturing future of these brands in the UK."

The grim announcement came only days after Nestl's global chief had launched an astonishing attack on former factory boss Chris White.

Peter Brabeck-Letmathe, Nestl chairman and chief executive, claimed Mr White had made the mistake of treating Nestl Rowntree like an ice cream business.

He said he constantly launched new products, like ice cream, for the new season. But confectionery was different, and the "hyperventilation" of so many product launches had brought the company an enormous amount of costs.

Nestl confirmed today it had suffered declining sales last year of its core brand KitKat, with the chocolate bar's share of the UK confectionery market falling from 4 per cent to 3.5 per cent.

However, it said latest data for January suggested that KitKat was outperforming the market and gaining share.

"Strong plans are in place for 2006 for KitKat, including major advertising support," said a spokeswoman.

Mr White left Nestl suddenly last autumn "by mutual agreement", after less than two years at the helm, to be replaced by Mr Grimwood.

The company hinted then at its dissatisfaction with Mr White's performance, saying that, in an extremely competitive UK

confectionery market, it now needed to improve its business performance.

But Mr Brabeck-Letmathe has now gone much further, saying, although sales had been stable, profits had been hit by the rush to launch new products.

"Chris White was very successful in running an ice cream business in Australia," he said.

"But he made one mistake - he applied the ice cream model to the confectionery business.

"In ice cream, you have to have new products and they live for a season. But the situation in confectionery is not the same. It's a much more stable business.

"What he did was to constantly launch new products; you could call it hyperventilation. This hyperventilation has brought us an enormous amount of costs."

However, he did say Mr White had brought dynamism to the business.

He said he was hoping for a return to stability under Mr Grimwood, with some new launches, but at a much slower rate.

Mr White is believed to be working in America. The Evening Press has made efforts to contact him for comment, but to no avail.

What a difference a year makes...

Nestl's damning criticisms of Chris White come just a year after he was being praised to the heavens by the company's top man in Britain.

Alastair Sykes, chairman and chief executive officer of Nestl UK, told the Evening Press last March he had brought Mr White in because he believed he had the "vision, expertise and skills to bring new impetus to our confectionery business. I haven't been disappointed".

He said Nestl Rowntree's share of the relatively flat confectionery market remained healthy.

"Chris has breathed new life into some of our most iconic brands and the results are very good," he said.

"Our 2004 quarterly share improved progressively from 16.3 per cent in the first quarter to 17.5 per cent in the fourth quarter, driven by six per cent year-on-year growth in consumer value sales of KitKat."

He said KitKat had generated £260 million of sales, with growth due to strong performance of the different variations, including Lemon Yogurt, White and Luscious Lime. Quality Street had also enjoyed a good year with a nine per cent increase in sales in 2004.

Mr Sykes, himself a former managing director at York, said he believed that under Mr White, Nestl could overtake Cadbury in the race to be the UK's top-selling chocolate maker.

Over the past five years, Nestl had invested £115 million in production facilities, of which £75 million has been invested in the York factory.

Nestl declined to comment on the gulf between Mr Sykes' statements last year, and those of Mr Brabeck this week.

White in the spotlight

CHRIS White was rarely out of the headlines when he ran Nestl Rowntree - and he seems destined to stay in them long after his departure.

Within weeks of his arrival in December 2003, he was dubbed The Bulldozer by some staff because of his uncompromising attitude.

The nickname seemed justified when he delivered a blunt rallying cry to managers in a memo leaked to the Evening Press. He called on them to make more chocolates at higher prices to make more money, and warned that if these possibilities did not excite them, they "should be working somewhere else".

Then a marketing magazine quoted him as saying Nestl Rowntree was a business in crisis. He later claimed he had been quoted out of context, and said the company was "all about growing".

He gave a massive boost to York's Christmas lights appeal when he agreed to sponsor the 2004 - and later the 2005 - illuminations.

His close friendship with guitarist Rick Parfitt paid off in January last year when Status Quo agreed to play a surprise gig for employees at York Racecourse to thank them for their hard work.

He became the first chairman of Yorkshire Science, a new group set up to promote the region's expertise in scientific innovation.

One might have thought that this work, along with running York's biggest manufacturer, might have been enough to fill anyone's time. But last autumn he revealed that after finishing his day job, he was enjoying a new role in his spare time, working as a Special Constable with North Yorkshire Police.

Updated: 14:26 Thursday, March 02, 2006