A Wellington pub stalwart believes cheap booze being sold in supermarkets and large liquor stores is eating away at the city's hospitality industry.

Alistair Boyce, managing director of the Backbencher pub near Parliament, wants to see legislation introduced that would set a minimum price per standard drink, across both off-licences and on-licensed premises.

He said Wellington's hospitality industry was in decline, because people were choosing the much cheaper option of buying alcohol at liquor stores or supermarkets, and drinking at home.

"If you take a unit of alcohol that goes through a liquor barn or supermarket to a person, it doesn't involve a lot of staff, or labour," he said.

"If you take that drink and put it through a restaurant or bar, with food, you could be employing four or five times the people."

Having a drink out cost more than buying it at the supermarket, due to a markup to cover the cost of the premises, wages, and other overheads, he said.

Big off-licence outlets could buy in bulk, making purchasing cheaper. "Liquor barns and supermarkets, they're often buying at significantly lower prices, and their margin doesn't have to account for wages, and service."

Hospitality Association Wellington branch president Jeremy Smith disagreed the hospitality sector was declining, but said it was under enormous pressure across the board.

What was happening now, which was not happening five years ago, was that businesses were closing, but not reopening.

"Five years ago, one would close, and it would open again with someone who had a better idea."

The impact of off-licence sales was not new, but the price difference was a big factor when it came to pre-loading – the practice of drinking at home before heading out to city bars.

"It's been a building crisis, it didn't just hit us overnight, it's something that's been going for some time.

"Why would people go into a bar and buy a Heineken for $10, when you can buy a dozen for $15?"