Zekelman Industries Chairman and CEO Barry Zekelman assesses President Donald Trump’s 35% tariff on Canadian imports on ‘The Claman Countdown.’
AriZona recently spilled the tea and it’s not sweet. In a recent interview with The New York Times, the company’s founder and chairman, Don Vultaggio, revealed its iconic 99-cent price point could be in jeopardy.
During the interview, Vultaggio blamed the potential price change on President Donald Trump’s proposed 50% tariffs on imported aluminum.
For three decades, AriZona has pulled off the impossible and Vultaggio warned that if the tariff on imported aluminum goes into effect, it could force AriZona to raise prices for the first time in more than 30 years.
“I hate even the thought of it,” Vultaggio told the Times. “It would be a hell of a shame after 30-plus years.”
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Cali Chiki wears glasses a pale blue oversized pullover from Asos, drinks an Arizona iced tea beverage in a metallic can, on February 28, 2021 in Paris, France. (Edward Berthelot/Getty Images / Getty Images)
AriZona, one of the top-selling iced tea brands in the U.S. reportedly sells over 2 billion cans annually, and generates more than $4 billion in sales. This is all despite being debt-free and highly profitable. The company has shouldered rising costs without passing them on — until now.
The 99-cent price, printed directly on every tall can, has been a pillar of AriZona’s “no-advertising, low-price” strategy since it launched in the early 1990s.
But the approximately 100 million pounds of aluminum used in the creation of the signature tallboy has become an issue since 20% of that is imported from Canada.
AriZona’s tallboys are mostly made from recycled materials in the U.S. but a portion of that is imported from Canada and is slapped with a 50% tariff at the border.
RETAILERS CAUGHT RED-HANDED USING TRUMP’S TARIFFS AS COVER FOR PRICE GOUGING
Don Vultaggio, Chairperson of the Arizona Beverage Company, attends AriZona Iced Tea’s “AriZonaLand” Grand Opening on September 19, 2024 in Edison, New Jersey. (Roy Rochlin/Getty Images for AriZona Iced Tea / Getty Images)
“Our price has been dramatically bumped up because of this tariff talk,” Mr. Vultaggio said, adding that he expected the few domestic aluminum manufacturers to raise their prices in response to the tariffs, he told The Times.
The president has maintained that the higher tariffs will strengthen the U.S. economy and help regain manufacturing back home, cut trade deficits and generate billions in revenue for the government.
Bottles of AriZona tea for sale in Publix Grocery Store. (Jeffrey Greenberg/Universal Images Group via Getty Images)
Vultaggio, however, hopes the admin realizes that protecting U.S. manufacturers shouldn’t give them a free pass to overcharge consumers.
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“I hope the administration understands and deals with the fact that if you’re going to protect American manufacturers, you can’t allow them to gouge the marketplace because of that protection. If I had Donald Trump’s ear, that’s what I would tell him directly, he said”
“What happens, happens,” he said. “We can find our way through it.”
