Regulatory News

The government’s decision to increase the tax burden on cigarettes met strong opposition from manufacturers. The president of Souza Cruz – a subsidiary of British Tobacco – Dante Letti, foresees a heavy price adjustment and a lot of pressure on smuggling. Philip Morris also showed a preoccupation with the growth of the informal market.

In an interview with the newspaper, Valor Economico, the CEO of Souza Cruz estimated that the large increase in taxes negates the positive effects of another decision taken by the government to combat the illegal activity: setting a minimum price per pack. For him, the measure tells the consumer that all products sold in secret have something wrong with them. However if the legal cigarette costs too much, Letti believes the consumer will be pushed to buy the illegal product.

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