The dispute between the Australian government and the country's brewers finally ended at the weekend, after the government relented and reluctantly agreed to cut beer excise.

The decision came after both Labour and the Democrats insisted the government should stick to a pre-GST promise that the price of ordinary beer would rise by only 1.9%. The government had argued that the promise was meant to apply to packaged beer.

As the government prepares to hand over about $A180m ($87.8m) of excise, which has already been collected back to the breweries Meg Lees, leader of the Democrats said: "It is money that should never have been collected, it should never have been rolled into the budget in the first place."

Last week the Australian Associated Brewers (AAB) said that the breweries would not be interested in keeping the money if the beer excise was overturned and the $180m beer tax already collected would go into a fund to be distributed to charity.

And as news broke that beer excise could be cut, Fosters Brewing Group Ltd watched its shares soar to a record high with stocks trading up 14 cents to a record $A5.29 at 1333 AEST.

According to analysts a combination of factors was driving the current interest in the beer and wine company. These include the current rush to defensive stocks, a greater appreciation of the value of its $A2.9 billion Beringer wine estates acquisition last year and the positive impact of the cut in beer excise.