50% Tariffs Raise Concern in Food Sector

The imposition of 50% Food Tariffs by the United States on Brazilian products has had a significant impact on the bar and restaurant sector, which is still recovering from the effects of the pandemic.

With more than 1.7 million food establishments in Brazil, especially in São Paulo, the new tariffs could put pressure on the costs of essential inputs such as meat and dairy products.

This article will explore the impact of these tariffs on traditional happy hour prices, the challenges posed by inflation, and the complexity of passing costs on to consumers, as well as discuss the need for diplomatic solutions to protect jobs and investment in the sector.

Overview of the Bar and Restaurant Sector Post-50% Tariffs

The imposition of tariffs of 50% by the United States government on Brazilian products raised an alert in the bar and restaurant sector, which is still in the process of pandemic recovery.

With **1.7 million establishments** spread across Brazil, a significant portion of which are in São Paulo, concern is intensifying.

The economic impact of these measures can be felt directly in the costs of inputs, such as meat and dairy products.

According to a study by Fiemg, these tariffs can potentially reduce the competitiveness of Brazilian products, in addition to affecting the population's purchasing power.

This scenario is particularly challenging for business owners trying to balance their budgets and offer affordable prices to consumers during happy hour, a traditional time for socializing.

Miguel Alves, president of Abrasel, highlights that the elasticity of demand makes it difficult to pass on costs, threatening revenue in a sector that is still facing the weight of inflation.

A economic pressure generated by these tariffs highlights the need to seek diplomatic solutions, preserving jobs and ensuring the continuity of long-term investments.

Pressure on Input Costs and Impact on Happy Hour

The 50% tariffs imposed by the United States on Brazilian products are causing greater pressure on costs of essential inputs in bars and restaurants, especially during the happy hour.

With the increase in the price of beef and of the dairy products, establishments face the challenge of adjusting their prices or absorbing costs, without compromising customer movement.

This is directly reflected in the pricing of dishes and drinks, which are essential for consumers who frequent happy hour looking for more affordable options to relax after work.

Furthermore, business owners in the sector have expressed concern that this cost pressure could lead to customer alienation.

As pointed out by the foodservice sector, as mentioned in Goyaz portal, many establishments are already reporting financial difficulties due to the increase in ingredient prices.

This situation requires companies to adopt diplomatic strategies to minimize the impacts and preserve jobs in a scenario already weakened by the pandemic.

Thus, the delicate balance between maintaining the financial health of the business and not alienating customers becomes increasingly crucial.

Business owners need to consider the elasticity of demand when deciding whether to pass on costs, because, despite being a solution, increasing prices can reduce business in establishments.

Therefore, seeking solutions that maintain affordability may be the most viable alternative to overcome this challenging market phase.

Inflation, Demand Elasticity and Cost Pass-Through Strategies

In the current context of inflationary pressures and tariffs imposed by the United States, food service establishments face challenges in passing on costs.

Rising prices of inputs such as meat and dairy products can directly impact the invoicing of bars and restaurants.

According to reports from economists, the attempt to fully pass on these costs to the consumer could be risky, considering the elasticity of demand.

In other words, by excessively increasing prices, there is a risk of driving customers away, reducing the frequency of consumption at events such as happy hour. as analyzed in an article in the Diário do Comércio.

Companies have opted for various transfer strategies:

Among several strategies, partial adjustment can balance inflation It is invoicing.

In a full pass-through scenario, a price increase of 10% could mean a drop in demand of 8%, according to market studies.

The partial pass-through, raising prices by 5%, predicts a more moderate decrease in demand around 3%.

In contrast, many restaurants choose not to pass on the costs, stabilizing customer attendance but compressing profit margins.

Furthermore, concern about customers' purchasing power is reflected in the cautious strategies of business owners. as Abrasel shows.

By prioritizing diplomatic solutions and incentives for local producers, the aim is to mitigate the impact of tariffs, maintaining competitiveness and preserving jobs in the sector.

A inflation highlights the need for innovation and adaptation, while seeking a balance between affordable prices and the financial health of businesses.

Diplomatic Solutions and Job Preservation

The 50% tariffs imposed by the United States on Brazilian products raise significant concerns for the bar and restaurant sector, which is still recovering from the challenges posed by the pandemic.

The increase in the cost of inputs, such as meat and dairy products, will have an impact on the final prices of products, compromising the traditional happy hour.

In this scenario, the urgent focus turns to the need for effective international negotiations.

According to a recent quote: “We believe that bilateral dialogue is the best way out,” says Abrasel.

Thus, the sector seeks diplomatic solutions that can mitigate the effect of tariffs, in order to ensure business continuity and job preservation.

The balance between maintaining competitiveness and ensuring affordable prices for consumers remains a constant challenge, reinforcing the importance of maintaining investments in the sector, ensuring long-term sustainability and growth.

The way to overcome these difficulties involves engaging in a joint movement that seeks to resolve trade issues through dialogue and international cooperation.

For more information, visit news about the impact of 50% tariffs.

Financial Balance and Affordable Consumer Prices

Bar and restaurant business owners find themselves in a dilemma when trying to achieve the financial balance while maintaining affordable prices to the consumer.

Amid a scenario of high tariffs and inflation, creative strategies are needed to face these challenges.

For example, many establishments are investing in renegotiations with suppliers to obtain better payment terms and discounts on essential inputs for daily operations.

This approach not only reduces costs, but also prevents final prices to customers from increasing significantly.

In addition to negotiations, a common practice is to adapt the menu.

Restaurants are choosing to add or highlight dish options that utilize local and seasonal ingredients, which are typically less expensive.

Pricing strategies, such as the markup method, help adjust prices to ensure a reasonable profit margin without sacrificing consumers' purchasing power.

Another measure adopted is strict inventory control, which aims to minimize waste and optimize the use of each resource.

In times of nutritional crisis, companies need to be creative and efficient.

Investing in team training on resource management and how to provide excellent service, even with tight budgets, also stands out as a way to build customer loyalty, thus ensuring continuous revenue that allows you to face cost adversities.

of costs.

In short, Food Tariffs represent a critical challenge for the bar and restaurant sector, which seeks a balance between revenue and affordable prices.