Chipotle says Mexico tariffs could cost the company $15 million

Source: The Hill | June 3, 2019 | Marina Pitofsky

President Trump’s proposed tariffs against Mexico could cost Chipotle Mexican Grill Inc. $15 million in additional costs this year, including from avocado imports, Bloomberg News reported Monday.

“If the tariffs become permanent, we would look to offset these costs through other margin improvement efforts already underway,” Chipotle CFO Jack Hartung said in a statement to Bloomberg. “We could also consider passing on these costs through a modest price increase, such as about a nickel on a burrito, which would cover the increased cost without impacting our strong value proposition.”

The restaurant chain sources their avocados from Mexico, according to Bloomberg.

The Trump administration’s proposed 5 percent tariff on goods from Mexico is scheduled to take effect June 10 and increase to 25 percent, “unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” according to a statement from the White House Thursday. 

Some Mexican avocado prices already increased this year, but Hartung told Bloomberg News the restaurant will not switch to pre-mashed or processed avocados, which would be cheaper.

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