Ask any licensee what's eating their margin and you'll most likely get the same answer:energy, rates, wages, duty. All are very true, very painful, and largely out of their hands.
However, there is another cost sitting on the same P&L that gets nowhere near the same scrutiny: the drinks bill itself. Not the duty on it, or the VAT, but the actual price paid to the wholesaler for the keg, the case, the bottle. For most venues, it's the single biggest controllable cost in the business, and for a huge number of them, it's quietly bloated.
This isn't a knock on publicans. We know that nobody has time to re-shop every supplier line whilst also running a floor on a Friday night. But, that gap between "too busy to check" and "actively overpaying" is exactly where margin disappears - a few pence a pint, a few pounds a case, multiplied across every delivery, every week, for years.
The numbers behind the squeeze
The scale of the problem became a lot clearer this year. Research from payments provider Dojo, covered by The Drinks Business in April 2026, found that costs for hospitality businesses have outpaced general consumer inflation by 11.75% over the past decade - the widest gap of any UK sector studied.
If you break it down by segment, it gets sharper still:
- Catering businesses saw operating costs rise 62% over ten years, with materials and supplies (food, drink, disposables) up a staggering 113%.
- Hotels absorbed an 83% jump in payment processing costs alone.
- Pubs and bars saw technology and software costs climb 167%, on top of the same relentless rises in rent, energy, labour, insurance and training hitting the whole sector.
As Charlie Ashworth, Dojo's Head of Research & Insights, put it: understanding where your money is actually going is "now a strategic advantage," not a nice-to-have. The operators protecting margin in 2026 aren't the ones working harder, but the ones who've stopped guessing.
And the pressure isn't easing. Alcohol duty rose again on 1 February 2026, up 3.66% in line with RPI, feeding straight through the supply chain into wholesale prices. Diageo's 5.2% wholesale price hike on Guinness alone has been enough to put the idea of a £10 pint back on the front pages. Every one of these increases lands on the invoice before a venue gets the chance to push back.
Why don't more pubs notice they're overpaying?
Drinks pricing is built to be hard to compare. A few reasons this stays invisible month after month:
Loyalty gets mistaken for value. Sticking with the same wholesaler for ten years feels like a relationship. Sometimes it is one, but "we've always used them" is not the same as "we're getting the best rate available today" - and most operators have no easy way to tell the difference, because they've never actually tested the market.
Invoices are designed to be skimmed, not audited. Rebates, volume discounts, delivery charges, minimum order fees and promotional pricing all sit on different lines, in different formats, from different suppliers. Comparing one wholesaler's terms against another's is a job most managers simply don't have the hours for.
Tie status gets misunderstood. Tied tenants often assume they have no negotiating room at all, when in reality most tied agreements still leave real flexibility on wines, spirits, soft drinks and minerals. Free-of-tie operators, meanwhile, often stay with a single supplier out of habit rather than because they've checked what a second or third quote would look like.
There's no benchmark. Retailers know exactly what a competitor charges for the same trolley of goods, because prices are on display. Hospitality has no equivalent. A licensee in Leeds has almost no visibility into what a comparable venue in Leeds (let alone Liverpool!) is paying for the same keg of lager.
Put those four things together and you get an entire sector where overpaying isn't the exception - it's the default.
What is a smarter way to operate?
UKHospitality's own guidance on purchasing points to the same handful of levers, again and again: rationalise what you buy, get real visibility into what you're spending, reduce how fragmented your supplier base is, and (critically) use market data to negotiate rather than accepting whatever renewal terms land in your inbox.
The strongest lever of all is one independents have traditionally struggled to access: competitive tendering. Large pub groups and managed chains run their drinks lists out to tender as a matter of routine, forcing wholesalers to compete on price for the business. Most independent venues have never done this once, simply because getting multiple wholesalers to quote on a full drinks list, and comparing the results fairly, has historically taken more time than most operators can spare.
That's the exact gap that's starting to close. Group purchasing platforms and digital procurement tools now give independent and multi-site operators the kind of buying power that used to be reserved for national chains - without the paperwork.
A quick way to check if you're one of them
Before you assume your pricing is fine, it's worth a genuinely honest look:
- When did you last get a competing quote on your full drinks list - not just one line, the whole list?
- Do you know your current rebate structure, and when it's due for renewal?
- Have you checked whether your tied agreement actually covers everything you think it does?
- Could you say, right now, whether your case price on your top five lines is above or below the current market rate?
If any of those made you pause, you're not alone. And it's a strong sign that there's margin sitting on the table.
The real fix isn't working harder, it's buying smarter
None of this is about switching wholesalers for the sake of it, or chasing the cheapest possible price at the expense of service and reliability. It's about knowing what fair actually looks like, so you can negotiate from a position of information rather than habit.
That's precisely the problem Liquid Market was built to solve. Instead of one venue trying to benchmark itself against a market it can't see, Liquid Market puts your drinks list out to multiple wholesalers at once, lets them compete for your business, and hands you the best price with none of the admin. Better prices, zero hassle - and a lot less margin quietly leaking out of the back door.
FAQs
How much could a pub realistically save on its drinks bill? It varies by venue and product mix, but savings typically come from two places: securing a sharper unit price through competition, and eliminating the small, repeated overcharges (delivery fees, expired rebates, out-of-date pricing) that accumulate unnoticed over time.
Does being tied to a pub company mean I can't shop around? Not entirely. Most tied agreements are specific to certain product categories, usually beer and cider from the landlord's nominated supplier. Wines, spirits, soft drinks and minerals are very often open to competitive buying even within a tied lease - it's worth checking your agreement rather than assuming.
How often should a venue re-tender its drinks supply? Annually is a sensible minimum, and more often if you're on rolling terms. Wholesale prices, rebate structures and duty rates all move throughout the year, so pricing that was competitive twelve months ago may no longer be.
Is switching wholesalers disruptive to day-to-day operations? It doesn't have to be. The disruption most operators fear usually comes from doing it manually - juggling quotes, contracts and delivery schedules themselves. Procurement platforms that manage the comparison and switch on your behalf remove most of that friction.