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Chipotle On Trump's Border Tax: Not Worried 'Until And Unless This Comes To Pass'

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Chipotle On Trump's Border Tax: Not Worried 'Until And Unless This Comes To Pass'
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Mexican food lovers are worried about what a 20 percent border tax could mean for avocado and tomato imports. About 93 percent of avocados and 71 percent of tomatoes sold in the U.S. come from Mexico, according to the Hass Avocado Board and the U.S. Department of Agriculture, respectively.

Chipotle Mexican Grill, Inc. (NYSE: CMG) isn't yet ready to panic.

"There are a host of variables that can impact upon food costs (weather, supply and demand, and public policy decisions, among others),” a Chipotle spokesperson told Benzinga. “If any events impact our food costs in material ways, we’ll make that information available in a timely fashion, but we’re not going to speculate about what any of these events might mean. Until and unless this comes to pass, it's purely a speculative matter."

The company uses about 35.4 million pounds of avocados annually, and TheStreet reported that every $10 increase in case pricing could impact company earnings by $0.17 per share.

As of last quarter, one crate costs as much as $75, and a 20 percent tariff would prompt a $15 spike. With about 28.95 million shares, this could translate to a total earnings loss of $7.38 million for Chipotle.

Despite the implications of proposed trade policies, the company's stock rose steadily throughout January. Shares were trading at $412.43 at time of publication.

Taylor Cox contributed to this report.

Posted-In: Border Tax Donald Trump Trump border taxNews Politics Restaurants Interview General Best of Benzinga

 

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