Iran conflict and fuel price surge piles pressure on UK pubs

Ongoing conflict in the Middle East continues to have a knock-on effect in the UK – especially for pub businesses, where rising fuel and supply costs are starting to hit hard.

New data reveals that businesses are being hit by a “tidal wave” of cost increases in the supply chain, with the war in Iran pushing fuel prices higher in recent months and driving up transport and delivery costs across the board.

This comes as the number of licensed pub premises falls drastically, with over 300 pubs, bars, and restaurants closing their doors since the start of the year.

The average pub delivers £1.3m of economic and social value in the country, but these worrying figures risk speeding up closures, hitting local communities, and putting even more pressure on pubs that are already struggling to stay afloat.

Pubs hit by supplier surcharges and fuel costs

Since February, Brits have been feeling the pinch of fuel prices, and now these high costs are feeding through the supply chain and hitting pubs with hefty surcharges.

According to RAC data published this week by The Morning Advertiser, petrol prices were around 135p per litre in January, and jumped to 158p by mid-April. Similarly, prices for diesel climbed to 191p within the same period.

There have been warning signs for some time. In March, businesses were warned to expect price increases for products including beer, food and furniture due to the conflict in the Middle East.

SALT Brewery managing director Edd Simpson told The Morning Advertiser that he’s “already seeing surcharges being introduced by wholesalers” and that financial woes will only become “more pronounced”.

This couldn’t really come at a worse time for pubs, as they continue to battle against rising business rates and an increase in alcohol duty. Meanwhile, value-added tax (VAT) continues to hurt businesses, with establishments reportedly keeping just 28p out of every £6.80 pint.

Hospitality closures rise as cost pressures take their toll

Unsurprisingly, the bleak economic picture has led to a rise in hospitality businesses closing their doors for good in the past few months. 

Market research group CGA by NIQ reveals that the number of venues across the UK declined by 0.3% in the first three months of 2026. 

In March, the total number of venues stood at 98,609 – down 305 since December 2025, which equates to a net loss of around 3.4 closures a day. Casual dining was reported to be hit the hardest, with outlet numbers dropping by 0.9%.

“Soaring costs have taken a heavy toll on hospitality in the first quarter and forced hundreds of businesses to close, with distressing impacts for the operators and employees concerned.” Karl Chassel, director of hospitality operators and food for EMEA at NIQ, told Restaurant Online.

“Many pubs, bars, restaurants and other outlets have shown remarkable resilience in the face of unprecedented challenges, but thousands are now nearing breaking point. Without targeted support, more closures can be expected over the rest of 2026.”

How pubs can adapt to survive rising costs

Surviving these new cost challenges won’t be solved in one fix. Instead, it will need a mix of smarter pricing, tighter operations, and better supplier management.

While businesses may be reluctant to raise prices for fear of losing customer loyalty, being selective can help soften the impact. For example, raising prices on higher-margin or less price-sensitive items (such as premium spirits, cocktails, and speciality drinks) and using peak-time or event-based pricing can help offset rising costs without putting off customers and still protecting profit margins.

At the same time, pubs should actively renegotiate with suppliers, consolidate orders, or consider switching to more local sources to reduce exposure to transport costs. Cutting down on delivery frequency or using cash-and-carry options can also help to offset fuel-related surcharges.

Moreover, pubs’ strong social value means businesses should consider events or themed nights to encourage people to visit and spend more.

In this sense, it’s as much about innovating as it is finding ways to raise prices that don’t impact footfall. The pubs that adapt quickly and keep giving people a reason to visit are the ones most likely to survive this difficult patch.

Discover the ales and ails of hospitality

Planet of the Grapes founder Matt Harris has over 25 years of experience in hospitality. Read his bi-monthly column for Startups now.

Read Whining and Dining