For around 20 years pensioners have received vouchers from the brewer at Christmas to exchange for S&N beers and ciders in supermarkets.
But a rise in the number of people claiming the benefit has prompted the company to withdraw the "unaffordable" scheme, which saw workers receive £30 in vouchers each year.
A spokesman for Scottish & Newcastle said: "We can confirm that we have written to S&N UK company pensioners informing them that we will not provide vouchers
"The decision to discontinue this benefit was not made lightly and we appreciate that it will cause some disappointment. However, the current business climate demands that we look long and hard at all our costs in order to safeguard the company's long-term prosperity.
"In addition, we have experienced consistent increases in the number of active pensioners and dependants within the company pension plan, which has grown over 15% in the past five years. These two factors have led us to conclude that the continued provision of this benefit is, regrettably, no longer affordable."
The firm assured all of its former employees that the decision to remove the voucher benefit would not have any impact on their current pension payments. The company will also continue to fund the annual inflationary increase to their pension payment this year, which amounts to a 5% rise for the majority of scheme members.