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Headlines

Italian coffee maker Illy warns tariffs will push up US prices

Published by Global Banking and Finance Review

Posted on April 1, 2025

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By Elisa Anzolin

MILAN (Reuters) - Italian premium coffee maker Illycaffe' will be forced to raise prices in response to any tariffs imposed this week by U.S. President Donald Trump's administration, its CEO Cristina Scocchia said on Tuesday.

Scocchia added that Illy would also look in the longer term at building a plant in the U.S. if it does get caught up in Trump's "Liberation Day" plan for tariffs designed to target countries believed to have disadvantaged American goods and workers.

"Duties will be passed on to the final price... we, as I guess other players, are evaluating in what percentage," she said in a telephone interview.

The industry's margins are already under pressure due to raw bean price increases.

Illy kept prices steady last year despite a sharp increase in arabica bean prices but in 2025 it has increased prices by an average of 4% globally.

The CEO added that some of the products sold in the U.S. could possibly be produced locally but the rest of the production would remain in Italy, where she confirmed a 120 million euro investment to double production capacity.

"This is a feasibility study we are doing at the moment.. but building a roasting plant (in the U.S.) and an assembly line takes time," Scocchia told Reuters.

The U.S. is the second largest market for Illy, contributing one fifth of its revenues.

Founded in the northeastern Italian city of Trieste in 1933, the company is majority controlled by the Illy family, who sold a 20% stake to U.S. private equity firm Rhone Capital in 2021.

Scocchia said a decision about a stock market listing was up to shareholders but that it did not seem an opportune moment.

"In this time of perfect storm between the skyrocketing cost of green coffee, the threats of tariffs, the volatile macroeconomic and geopolitical environment.. this does not seem to be the time to be thinking about a listing," she said.

Revenues rose 6% last year to 630 million euros, while its core profit was up 19% to 110 million euros, despite a 40% increase in green coffee beans, the group said.

(Reporting by Elisa Anzolin; Editing by Keith Weir)