Jump to full article: Columbia (SC) State, 2003-09-22
Author: KEVIN G. HALL / Knight Ridder Newspapers
Intro: CIUDAD DEL ESTE, Paraguay - A pack of Hollywood cigarettes at a gas station in Brazil sells for 62 American cents. Street vendors hawk the same brand for 39 cents. Both packs carry the Brazilian tax seal. Both come with the same photo of a very unhappy couple in bed and the warning: Smoking Causes Sexual Impotence.
The difference is that the street vendor's smokes are counterfeit, probably smuggled in from Paraguay. U.S. and British tobacco companies and their Latin American subsidiaries complain that they are losing the equivalent of hundreds of millions of dollars annually to smuggled or fake cigarettes, and they want Brazil to crack down on their smugglers and distributors. Brazil would net $500 million a year in lost cigarette-tax revenue, the industry's thinking goes, knock out unfair competition and maybe even consider lowering cigarette taxes.
Leading the campaign is Souza Cruz, Brazil's largest tobacco company . . .
At least 34 Paraguayan factories make cigarettes, but there's no accounting for their production. Officially, the plants produced 45 billion cigarettes last year and exported less than 10 percent of them. If that's true, Paraguay's 6 million citizens smoke a staggering average of nearly 7,000 cigarettes a year. . . .
On a trip with Paraguayan lawyer Mario Aguilera along the border with Brazil, a Knight Ridder reporter and photographer saw dramatic expansion at Paraguayan tobacco companies, none of which had its name on the building or at entrances patrolled by armed guards. . . .
Johns noted that U.S. tobacco-industry settlements yielded documents showing that BAT, Philip Morris Intl. (now a unit of Altria Group Inc.) and R.J. Reynolds Tobacco Co. relied on smuggling in Latin America in the early 1990s to help expand the smoking population.
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