How Brazil’s illegal cigarette trade fuels organized crime

A new study by the Getulio Vargas Foundation (FGV) finds a measurable connection between the black-market cigarette trade and violent crime. According to the research, commissioned by Abifumo, an association of Brazilian tobacco industries, the illegal cigarette trade correlates with bumps in violent crime.

According to the report, roughly 32% of all cigarettes sold in Brazil in 2024 were illegal, equivalent to about 33.7 billion units. The FGV researchers estimate that total losses to public coffers reached BRL 7.2 billion — split between BRL 3.9 billion in federal taxes and BRL 3.3 billion in state and municipal revenues. 

These estimates are based on calculations that factor in sales on the parallel market. Still, some economists note that this kind of analysis of the shadow economy should not assume the same volume would be sold if the illegal trade were shut down. Prices would likely rise, pushing the product into a different market segment.