The Chipotle Mexican Grill Inc food chain estimated on Monday there will be a US $15 million impact on the company if US President Donald Trump applies tariffs on Mexican goods, moreover the company said it could cover that amount by raising the prices of burritos by 5 cents.
The chief financial officer of the US company, Jack Hurtung, said Chiplote’s margins would be reduced by 20 to 30 basis points if the tariffs that Trump announced last week reach 25%, which would increase the prices of avocados.
Mexico being the United States main supplier of agricultural products, exported more than US $8 billion in vegetables last year, including US $2.070 billion in avocados, according to US government data.
“We know we can easily resolve the volatility of our supply chain by purchasing pre-ground or processed avocados,” Hartung said in an email.
“But we believe that the use of fresh ingredients improves the flavor of guacamole,” he said.
To reduce its dependence on Mexico, the world’s largest producer of avocados, the company said it has been looking for other supplier countries in recent months, such as Chile and Peru.