SANIBEL, Fla. — With new tariffs set to take effect on produce imports from Mexico, restaurant owners on Sanibel are preparing for yet another financial hurdle—rising food costs.
Watch as Sanibel Community Correspondent Anvar Ruziev speaks with restaurant operators on the Island about the upcoming tariffs and price increases:
According to the USDA, nearly 40% of all vegetables and about 60% of all fruit consumed in the U.S. come from imports. More than half of those imports originate from Mexico, and beginning April 2, they will be subject to a 25% tariff. For restaurants, this means increased expenses and tough business decisions.
Ron Rich, General Manager of Mudbugs, says while his restaurant sources most of its produce locally, rising costs will still impact profits.
"We probably won't raise our prices, we'll probably sit where we are because how much more can you make somebody pay for food?" Rich said.
He acknowledges that absorbing the costs might be the only option.
"You can only pass it on to the consumer so much, and then you just have to bite the bullet and say, ‘I'll make a little less money than I should,’" he added.
Many restaurants already operate on slim profit margins, according to Dr. Michael Collins, Director of Resort & Hospitality Management at Florida Gulf Coast University.
"You go and spend a hundred dollars for dinner, and you think, ‘Whoa, that's a lot of money.’ But after all the costs, the restaurateur may only be putting seven dollars of that hundred in their pocket," Collins explained.
While some restaurant owners may have no choice but to raise prices, others are finding creative ways to cut costs—like growing their own ingredients.
Thomas Juneau, owner of Island Pizza, is taking a proactive approach.
"We're starting to look into growing some of the smaller things—some of the herb stuff like basil and parsley—we'll start growing that here on the property," Juneau said.
Food prices have already been on the rise. The Bureau of Labor Statistics reported that grocery prices increased another half a percent in January alone, adding to financial pressures for businesses and consumers alike.
The 25% tariffs on Mexican produce imports are expected to take effect on April 2.
