Chipotle heads south of the border with opening of 1st location in Mexico

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Chipotle Mexican Grill is coming to Mexico.

The California-based chain said Monday it’s planning to open a restaurant in Mexico early next year, its first location south of the border in its 30-year history.

Chipotle is partnering with Alsea in Mexico City, a company that operates Domino’s, Starbucks, Burger King, Chili’s and other brands in South America and Europe. Alsea plans to explore additional expansion in Mexico and other locations in the region.

Nate Lawton, Chipotle’s chief business development officer, said the company is confident that its menu will resonate with Mexican diners.

“The country’s familiarity with our ingredients and affinity for fresh food make it an attractive growth market for our company," Lawton said in a statement.

But at least one U.S.-based Mexican chain has struggled to make it in Mexico. Taco Bell opened a few outlets in Mexico City in 1992 but they closed within two years. The brand opened another store in Monterrey, Mexico, in 2007 which also didn't last.

The expansion arrives as President Donald Trump’s tariffs on Mexican imports could increase costs for U.S. Chipotle locations.

Last week, the U.S. Commerce Department said it plans to withdraw from a 2019 agreement suspending an antidumping investigation into fresh tomato imports from Mexico. That termination, set to take effect July 14, means most tomatoes from Mexico will be subject to a 20.91% tariff.

Chipotle gets around half of its avocados from Mexico, but so far those are not subject to tariffs.

Chipotle, which was founded in Denver in 1993, has 3,700 restaurants and plans to open up to 345 new locations this year.

It has been focused on growing its international footprint. Last year, it partnered with Alshaya Group to open a restaurant in Kuwait, its first new market in a decade. It now has three restaurants in Kuwait and two in the United Arab Emirates.