Lion Nathan has reportedly ended its pay dispute with delivery drivers for its flagship beer brand Tooheys.

An agreement was reached last night (26 June) with unions and logistics group Linfox, which had won the contract to deliver Tooheys beer.

The change in tender had led to proposed new contracts for the drivers that could have cut their wages by up to 42%. The proposals angered the drivers, who last week blockaded the company's Lidcombe brewery.

The drivers were ordered back to work by conciliators in the dispute as union negotiations with Lion and Linfox continued.

TWU assistant secretary Wayne Forno told Australian Associated Press that the new contract secured the futures of the drivers and their families.

He said: "It means the drivers can afford to continue running their trucks and supporting their families. It is a very positive outcome. We have negotiated a fair contract - with a fair pay rate."

Lion was quoted as saying it was "pleased" that the dispute had ended. "When it became clear that talks with Linfox had broken down, we became directly involved in fostering a reasonable and fair solution for all parties," Lion Nathan Australia managing director Andrew Reeves said.

"We have said throughout this process that we wanted a fair deal for everyone involved."