Abstract:
BACKGROUND:The significant market share of illicit cigarettes in Brazil is well established in the literature, nonetheless lacking clarity in terms of its actual size. Paraguay has a paramount role in this discussion, acting both as a supplier of illegal tobacco products to Brazil and as buyer of inputs from Brazil. A proper analysis of the illicit cigarette market in Brazil necessarily involves a deeper discussion of the Paraguayan production chain and its interaction with the Brazilian market. METHODS:International data were used to establish the bilateral legal trade pattern of tobacco-related products between Paraguay and Brazil, including inputs and final outputs. Inspired by the technical requirements methodology, available unmanufactured tobacco within Brazil was obtained by adding-up domestic production with net imports. Its historical behaviour was compared with legal cigarette production patterns within Brazil. Supposing rational agents, these two links of the Brazilian cigarette production chain should behave similarly: for lower final usage, less domestically available supply. Any discrepancies would suggest something abnormal in the production chain. RESULTS:Brazil is a relevant legal supplier of intermediate goods for the Paraguayan tobacco complex and has an irrelevant position as legal buyer of Paraguayan tobacco-related goods (either inputs or final goods). Paraguayan net imports of production inputs seem to be abnormally high for their legal needs. In Brazil, a clear discrepancy between domestically available unmanufactured tobacco (input) and tax-based cigarette production (output) emerged throughout the years and, even more striking, has been growing over the years. CONCLUSIONS:Excessive cigarette production inputs in Paraguay suggest a potential oversupply of cigarettes in that country-likely diverted to illicit trade. Likewise, discrepancies in the Brazilian tobacco production chain are also evidence of illicit tobacco trading in Brazil-not necessarily of final products. A deeper analysis of the Brazil/Paraguay tobacco supply chain would be welcomed given the likely operation of these two countries as a single 'production/consumption hub' of both legal and illegal products (either inputs or final tobacco products). Public policies should foster controls not only on cigarettes but also on raw inputs for their production.
journal_name
Tob Controljournal_title
Tobacco controlauthors
Ribeiro LSL,Pinto VDCdoi
10.1136/tobaccocontrol-2019-055265subject
Has Abstractpub_date
2020-11-01 00:00:00pages
s310-s318issue
Suppl 5eissn
0964-4563issn
1468-3318pii
tobaccocontrol-2019-055265journal_volume
29pub_type
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