The competitiveness of the Brazilian tobacco sector will be compromised with the rise of more than 30 per cent in the Tax on Industrialized Products (IPI) charged on cigarettes sold in Brazil, the Sao Paulo State Tobacco Industry Union said on Thursday.

According to reports by Gazeta Mercantil, the former rate was 25 per cent for large companies, while now it will reach 33 per cent. Small companies, which previously paid 44 per cent, will now pay 58 per cent.
Gazeta Mercantil also reports that a new quality rating table for tobacco leaves will come into force in October 2007. The table is used by farmers to rate the tobacco leaves used in cigarette manufacturing. The new table lists only 41 classes, which, according to the Brazilian Tobacco Producers Association (Afubra) will improve the rating process for tobacco leaves. The current table has 48 classes.