With over 90 percent of its fireworks coming from overseas, Jaffrey-based Atlas Pyrovision Entertainment could be hard hit by a proposed 25 percent hike in tariffs on Chinese goods.
Atlas CEO Steve Pelkey said for the fireworks industry, there’s really no alternative to Chinese products. Whether it’s their display fireworks or retail, the majority are sourced from China and there’s no other country that manufactures the quality and quantity he needs for his business, he said Wednesday morning.
“Even if you were to combine production from Spain, Italy, Mexico and the very few and very small factories in the United States and Canada, it would only cover 10 percent of the demand,” Pelkey said.
Atlas once produced a portion of its own fireworks but had to shut down its manufacturing side of the business due to heavy increases in liability insurance – which continue to make manufacturing fireworks stateside unprofitable.
“It’s just unfortunate because this is an industry where there’s no alternative,” Pelkey said. “It just doesn’t exist.”
The proposed tariff increase wouldn’t just impact fireworks, but hundreds of other Chinese goods, nearly all Chinese products which weren’t covered under a separate tariff increase implemented last month.
This week, retailers impacted by the proposed tariffs are testifying at public hearings on the impact.
For Atlas, about 65 percent of its business is producing firework displays, with the remaining 35 percent is selling fireworks at storefronts in Jaffrey and Amherst.
Atlas Pyrovision imports about $1.2 million in fireworks from China for both its displays and commercial sales, which would mean an increase of about $300,000 in tariffs annually, Pelkey said. Undoubtedly, a portion of that increase would have to be passed on to consumers, Pelkey said – though in the case of Atlas, it would likely be an 8-10 percent price increase, instead of the whole 25 percent.
“This is so impactful, it has to be shared by a multitude of resources,” he said. “We wouldn’t be able to absorb it all, and neither would the customer and neither would the vendor, so in the end, we’ll all have to absorb some of it.”
Pelkey said even a 10 percent increase would hurt individual consumers, nonprofit groups and small municipal Fourth of July displays, most of which have a finite budget.
Hancock, for example, raised $8,100 with a warrant article this year for its annual Fourth of July festivities, an event put on by Pyrotechnic, a Pennsylvania-based company.
“It has been an ongoing tradition, but I know in matters of budget, the town takes an interest, so it certainly would have to be considered,” Hancock Town Administrator Johnathan Coyne said. “We’re a small town, and we try to keep the budget reasonable.”
Traditionally, Coyne said, Hancock raises the funds for fireworks partially with town funds, and partially with donations. The town would have to take any price increases into consideration when putting forth a warrant article. Whether to downgrade the show or increase the budget would ultimately be made by the voters at Town Meeting, he said.
“It is part of the town, and there are a lot of folks who are really passionate about the fireworks,” he said.
Rindge Selectwoman Roberta Oeser said the town had not put any funds in the budget this year for its annual Family Festival, held the weekend after the Fourth of July. Instead, the traditional fireworks display will be paid for with donations from local businesses – about $5,000 this year.
“It’s an important event for the town, it’s a great community event,” Oeser said. “It’s something we will have to take into consideration when we made a decision this year whether to put it in the budget or make it a fundraising effort.”
Kathy Furze, a member of the Jaffrey Chamber of Commerce and chair of Jaffrey’s annual Festival of Fireworks Committee, said any price increases won’t impact the Festival this year, as the committee has already completed its preparations for the event, which is the Chamber’s biggest fundraiser and draws tens of thousands of people to Jaffrey each August.
The festival relies on the fact that Atlas heavily discounts its services for the event, Furze said.
“Atlas has been so generous to us, and with the rising cost factors, we don’t know what the outcome down the road will be, but it will absolutely not impact this year’s festival,” Furze said.
While the company may have to scale back discounts and donations for some of its nonprofit displays, Pelkey said the Jaffrey Festival of Fireworks wouldn’t be one of them.
“Being I’m a native of Jaffrey and this is our home town, that would be off-limits,” Pelkey said. “We’re invested in this community and this is our family.”
Whether or not the Festival would be impacted, Furze said it would be a shame to see Atlas impacted by price hikes.
“I can only think of one or possibly two other companies that are so willing to step forward when there is a request or a need by any of the nonprofits, or the schools, fire or police,” Furze said. “Atlas is an anchor in this community.”