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Table 6 Key moments in the history of Paraguay’s tobacco industry and TTC complicity in the illicit trade

From: From transit hub to major supplier of illicit cigarettes to Argentina and Brazil: the changing role of domestic production and transnational tobacco companies in Paraguay between 1960 and 2003

From the 1960s Paraguay serves as a transit hub for BAT and PMI cigarette smuggling from the US to Argentina and Brazil
Late 1980s - early 1990s BAT and PMI increase their focus on cheaper brands, paving the way for Paraguay manufacturers to capitalize on this market
1989–1994 BAT and PMI compete in the illicit market in north-east Argentina
Mid-1990s - late 1990s BAT and PMI compete in the illicit trade in southern Brazil
1990s While BAT and PMI increase legal exports of cigarettes from Brazil to Paraguay for them to be smuggled back to Brazil, they lobby the Brazilian government to lower the excise tax on cigarettes, claiming this would reduce the black market. Brazil eventually reduces the excise tax per pack from approximately 40% of retail price to about 25% in 1999.
1994 Creation of Tabacalera del Este (Tabesa), soon to become Paraguay’s largest tobacco company and major regional supplier of illicit cigarettes
1994–1998 Brazil becomes Paraguay’s main source of cigarette imports (4 to 7 times the volume of Paraguayan cigarette consumption), with Uruguay becoming another major supplier.
From the mid-1990s Domestic cigarette production and illicit trade out of Paraguay begins to grow (tripled between 1995 and 1998, doubled between 1999 and 2003 to 27 bn sticks, approximately 8 times total domestic consumption)
1999 Brazil’s 150% export tax on cigarette exports to Latin American countries ends TTC scheme but shifts supply of illicit trade to Paraguay