Restaurants

Chipotle could a take hit under President Trump's proposed import tax

Fox Foodie: Luis Hernandez and Ashton Keefe discuss Chipotle's new burger venture, Coca-Cola's focus on foodies and the daughter of Gordon Ramsay branching out

 

After facing a series of foodborne illness scares and multiple lawsuits, Chipotle Mexican Grill could be taking another hit.

President Donald Trump's proposal of a 20 percent tariff on goods from Mexico to help pay for a border wall has some South of the Border food enthusiasts concerned. 

As a big importer of avocadoes on other Mexican imports, the Mexican-American burrito chain could take a major financial hit. 

Could this mean no more guacamole?

HERE'S HOW CHIPOTLE PLANS TO BRING BACK BUSINESS IN 2017

Nomura-Instinet analyst Mark Kalinowski said he believes Chipotle gets around 70 million pounds of avocados (about 70 percent if its total supply) from Mexico, reports Vice.  A 20 percent price hike would have a severe impact on the chain's budget. 

Depending on the time of year, the chain sources the avocados exclusively from Mexico. The company also imports avocados from California, Chile and Peru based on peak growing seasons.

In additional to avocados, Kalinowski wrote in a note published Tuesday that his firm believes "all of its [Chipotle's] limes, the majority of its jalapeño, less than half of its tomatoes, and small amounts of other items (e.g., cilantro)" come from Mexico, too. 

The border tax would likely lead to higher menu prices at Mexican chains like Chipotle, Kalinowski argued, which could have a negative affect on a chain that's already trying to woo back consumers. 

Other products that could potentially be affected by the proposed tariff are tomatoes, beer, and tequila. 

Last year, same store sales were down over 13 percent, reports the Denver Post.

FOR THE LATEST FOOD FEATURES FOLLOW FOX LIFESTYLE ON FACEBOOK 

Fourth quarter earnings fell to $16 million, down 76 percent from $67.9 million in the same period a year ago.

However, Chipotle says it has quite a few tricks up its sleeve to increase sales this year. The company is planning on improving their hiring process (which it says will lead to more efficient serving and customer service) as well as making food safety changes.

A sweet treat may also make a debut on the menu this year.