Brazilian tobacco industry warns of rising independent growers and higher taxes

A public hearing held by the Chamber of Deputies' Agriculture Committee brought together representatives of Brazil's tobacco sector who said the integrated production system – in place for over a century – is under threat. Deputy Heitor Schuch (PSD‑RS) noted that the number of independent growers now exceeds 20% of total producers and that higher taxes are squeezing margins, with the price of tobacco falling from R$ 340 per arroba in January to R$ 260 today.

Industry leaders warned that further tax hikes could boost the illegal cigarette market. “The increase of the tax tends to strengthen the illegal market, harming workers and reducing state revenue,” said Rangel Marcon, president of the National Federation of Tobacco Workers. The government collected R$ 24 billion in tobacco taxes last year, while producers earned R$ 14 billion, highlighting the sector’s fiscal significance.