Author: José Sergio Osse

Source: ISTOÉ Dinheiro - SP - BUSINESS - 12/09/2009

The vast majority of Brazil's 26 million smokers are found in the southern and southeastern states, the richest in the country. The link between income and cigarette consumption seems obvious, but it is not enough to explain, alone, why there is more smokers in these regions. The analysis of this picture is a little more complex. Pressed by the restriction on consumption and the ban on advertising, cigarette manufacturers were able to create new ways to win over consumers. More subtle marketing actions and betting on younger smokers have had a positive effect on product sales. But they do not prevent the reduction of consumption.

According to the National Cancer Institute (Inca), in 1989, 30% of the Brazilian population smoked. Today, that index stands at 15%.
One of the strategies adopted by the companies directly explains why the rate of cigarette consumption in Rio Grande do Sul is so high. “The cigarette factories are there. This makes a lot of difference ”, says Cristina Perez, a psychologist at the Inca's control and smoking division. Among Brazilian capitals, Porto Alegre has the second highest proportion of smokers in relation to the total population, behind São Paulo. In the state capital, 19,5% of the inhabitants are smokers, for a total of 276,9 thousand people. In the state, the companies' strategy is to engage in the community. In this way, it becomes an important part of local society and improves its image with the population - and with consumers. “In the cities where they are, companies sponsor choirs, schools, social projects. This influences the dissemination of their product in these regions ”, explains Cristina. The strategy is also applied in the Northeast, in regions close to the tobacco producing areas, although in these places the low income limits the results.

According to Cristina, another weapon of cigarette manufacturers to circumvent the siege against their product is to start recruiting supporters from an early age. In other words, the watchword is to invest in the young consumer, in an attempt to train tomorrow's smoker today. “The restriction on advertising helped a lot, but it was not complete. She left out the point of sale ”, warns the Inca psychologist. Taking advantage of this loophole in the restriction, the manufacturers take the opportunity to carry out promotional campaigns in bars and nightclubs, offering cigarette "samples" to adolescent consumers. “More than 90% of regular smokers started before age 19. For this reason, manufacturers strive to co-opt young people for a specific brand, as they tend to become very loyal consumers, ”she says. Currently, about 15% of Brazilian smokers are between 18 and 24 years old, despite all campaigns against smoking and restrictions on consumption.

Even the price of the product is not an impediment to smoking, although Brazil is in the group of countries that most tax the product in the world. According to Cristina, this is because, despite the high tax burden on cigarettes, the unit price is still very low, reflecting the low wages paid by the industry. “Despite the high taxation, the final value is very low. The Brazilian cigarette is one of the cheapest in the world ”, she says. "This is the fault of tobacco growers, who pay very low wages, in a kind of semi-slavery, which brings down the cost of production", he accuses.

The Brazilian market presents yet another peculiarity that, at least in this case, affects both smokers and the manufacturing industry: illegal products, smuggled fruits, piracy and counterfeiting. According to the Etco Institute, 15% of cigarettes in Brazil are smuggled. In addition, according to the World Health Organization (WHO), 35% of cigarettes consumed in Brazil are illegal. “In general, the consumption of contraband products is slightly stronger in border areas”, says Etco's president, André Franco Montoro Filho. "But, in general, the penetration of these products in the market is similar to the proportion of smokers in relation to the total population," he says. According to Montoro, this is true for all types of illegal cigarettes, not just smuggled ones. The product, he says, has strong economic appeal to the consumer and, not by chance, is widely consumed by the low-income population. According to Etco, 61% of illegal cigarette users belong to class C. And that is exactly why the tobacco industry in Brazil is so engaged in the fight against smuggling. After all, according to Cristina, it is in this public, with less access to information, that manufacturers see the future of their activity. This, at least, while smoking outdoors is still allowed.