Take It From Brazil, Biden's Ban on Flavored Cigarettes and Cigars Will Be a Disaster
Brazil now has one of the largest cigarette markets in the world, despite its efforts to rid the country of cigarettes through prohibition.
The Biden administration's flavored cigarettes and cigars ban, currently under final review by the Food and Drug Administration (FDA), will soon make it illegal to buy or sell menthol and flavored tobacco products in the United States. Having announced its intention to prevent people, especially children, from becoming addicted to cigarettes and other drugs, Biden's FDA will have to grapple with the consequences of their chosen method.
A similar ban in Brazil gives us a window into the probable outcome of Biden's flavored cigarettes legislation. In 2012, after a series of court battles, Brazil became one of the first countries in the world to fully ban flavored cigarettes, wanting to minimize the demand for cigarette products and curb smoking in the country, particularly among children.
To enforce the ban, Brazil has used its federal police force and its military police to crack down on the illegal cigarette market—with its government and law enforcement being one of the most vocal proponents of tobacco crackdowns since the mid-1980s. But Brazil quickly faced the fallout from its prohibitionist policy.
Brazil's demand for illegal cigarettes, particularly flavored cigarettes, only increased. Illegal actors quickly entered the market, leading the Brazilian government to conduct dangerous raids against illegal cigarette providers, with some resulting in bystanders being killed in the crossfire. The Brazilian government has lost billions of dollars in enforcement and tax revenues, while expenditures on illegal cigarettes rise.
Brazil now has one of the largest cigarette markets in the world, despite its efforts to rid the country of cigarettes through prohibition. According to the Brazilian Institute for Competition Ethics (ETCO), the illegal cigarette market now represents about half of the entire cigarette market. Illegal cigarette consumption nearly doubled from 2008 to 2013 and in Brazil's border areas it nearly tripled.
Much like at the U.S. southern border where law enforcement struggles to monitor the passage of illegal goods and immigrants, Brazil's police have had little success controlling the influx of illegal cigarettes from neighboring countries. Illegal cigarettes are easy to hide and nearly indistinguishable from legal cigarettes. Corruption between local law enforcement and the cartels makes enforcement even more impossible.
As the prohibition of drugs makes market prices increase due to risk and lower legal supply, more money flows into the illegal market, funding criminals instead of regular people. Brazilian drug gangs had one of their best years on record in 2022. With multiple gangs reporting billions of dollars in annual revenues, the Brazilian drug market is becoming ever more crowded and violent.
Cigarette companies, which have invested billions in curbing the illegal cigarette market (partly for the sake of their own market control), have reported that illegal cigarette consumption has increased in the last decade, as well.
Although overall cigarette demand decreased, the Brazilian government has spent millions trying to curb this market, with little success. Its taxation efforts, which have some actual science behind them, have been more successful at preventing smoking in Brazil.
If Biden isn't careful, the same could happen in the United States.
If Biden's ban passes as-is, menthol cigarettes and flavored cigars will be provided by criminal actors who will fill the demand void left by the FDA pushing out legal sellers. Upstanding citizens will not be willing to take the risk associated with breaking the law or competing within the illegal market and will leave the market for criminals to control. In Brazil, the illegal cigarette market is now controlled by literal slavers in sweatshops.
Biden's ban will also expand the presence of drug cartels. The flavored cigarette market is worth about $10 billion and is expected to reach $23 billion by 2033. Cartels will not let that market opportunity pass. Large existing drug cartels (including some from Brazil) might spread to this new market, and new gangs might be created to fill local demand.
These cartels will fight over the market, potentially leading to violence. There are too many examples of turf wars between drug cartels leading to civilian casualties, including against Americans. In the favelas of Rio de Janeiro, Brazilian cartels fight over territory for illegal cigarette markets. The illegal flavored tobacco market that will soon flood America's streets might be the next battlefield.
Biden's administration has already said that "there's no going back" on this policy. He must reconsider. As Brazil shows us, prohibitionist drug policies lead to more illegal money, more drug gangs, and more violence in the streets.
