Taco Bell says it's not affected by the US import ban on Mexican avocados thanks to a distinction in US customs laws

mmeisenzahl@businessinsider.com (Mary Meisenzahl) - Friday


A man selling avocados in Mexico City, Mexico, in February 2018. 

Edgard Garrido/Reuters

The US banned avocado imports from the Mexican state that produces the bulk of imports to the US.

Taco Bell imports guacamole, which is subject to a different set of import laws than whole avocados.

Some smaller chains say they're close to running out of avocados.

The US recently banned the importation of avocados from Michoacán, Mexico, which exports about $3 billion of avocados annually, but some restaurants, including Taco Bell, are still able to serve guacamole.

Avocado imports, like other fruits and vegetables, are governed by the US Department of Agriculture (USDA). About 80% of avocados consumed in the US are imported from Mexico, so restaurants that rely on them could be looking at tough times and high prices ahead.

Taco Bell, which sells guacamole as part of its menu of Mexican-style fast food, doesn't have to worry though. The chain imports guacamole, not whole avocados, Taco Bell told Insider.

"Taco Bell is not impacted by the US halting avocado imports from Mexico," the chain told Insider in a statement.

Guacamole is a processed food, and governed by different rules than avocado, which is its main ingredient, John Armonda, director of trade services at Trade and Export Control Solutions, told Insider.

"Everything that comes across the border has its own number," used for product identification, he explained, and avocados and guacamole are classified differently. He likened them to apples and applesauce, one of which is governed by the USDA, while the other is a processed food under the authority of the Food and Drug Administration (FDA).

Taco Bell and other restaurants and grocery chains that import pre-made guacamole are not impacted by the ban, which is on whole avocados. Taco Bell did not respond to further questions seeking clarification on its import strategy.

The avocado ban began on Friday because a US safety inspector received a threatening phone call, Bloomberg reported. It will "remain in place for as long as necessary to ensure the appropriate actions are taken, to secure the safety of APHIS personnel working in Mexico," the Department of Agriculture told The New York Times, referring to the Animal and Plant Health Inspection Service.

Experts say California isn't able to produce enough avocados to meet demand. California supplier Eco Farms says wholesale clients are already reaching out about securing their supplies, Bloomberg reported. Prices could increase as much as 25%, Eco Farms president Steve Taft said. Wholesale prices have already increased by 22% since November, according to data released in February from Restaurant365.

At Chipotle, workers make fresh guacamole daily in stores. The chain told Insider it has just "weeks of inventory available," and told Bloomberg it is working to use its network to bring in avocados from other regions, including Peru.

Smaller restaurants that don't have the same supply chain pull, like 75-unit Salsaritas, will be out of guacamole in a week, Bloomberg reported.