BAT inflate data to promise jobs if vapes are legalized in Brazil
Company claims the devices would create 13,000 new jobs in rural areas, but BAT's e-cigarettes are manufactured in China and, even if they used nicotine extracted from Brazilian tobacco, production would require fewer than 100 farmers.
*contributed Raquel Torres
From the top of a corporate rooftop terrace at the upscale Carlton Tower building in Brasília, overlooking the headquarters of the country's main public banks, tobacco industry lobbyist Lauro Anhezini Júnior was listing grandiose numbers for the state deputies from Rio Grande do Sul who were watching him online during a hybrid session of the state's Legislative Assembly in October 2024.
Around R$ 1.4 billion in revenue, 12,950 jobs generated in the countryside, and at least R$ 70 million more in rural producers' pockets if vapes — banned in the country since 2009 by the National Health Surveillance Agency (Anvisa) — were legalized. Brazil, the executive promised, had the potential to even become an exporter of electronic cigarettes, which would double the numbers.
"It has been economically proven that the regulation of electronic cigarettes in Brazil would be broadly favorable to national tobacco farming, generating a mass of jobs, income, and relevant revenue for this sector," said Anhezini, who is a director of the Brazilian Tobacco Industry Association (Abifumo) and British American Tobacco (BAT), formerly known as Souza Cruz, maker of brands such as Kent and Lucky Strike, as well as the now-defunct Derby, Free, and Carlton. The data came from a study by the Federation of Industries of the State of Minas Gerais (FIEMG) commissioned by BAT itself.
The advance contradicts the concerns of health organizations, which stress that vapes drive nicotine dependence, particularly among younger people, due to their appeal to new generations. In 2024, a letter signed by 80 medical entities came out against legalization in Brazil. "The user profile of these devices is different from the classic smoker: it is a population with high education and income, concentrated among girls, adolescents, and young people," says epidemiologist André Szklo from the National Cancer Institute (Inca). "[If legalized] we will bring an additional profile to the tobacco epidemic in Brazil."
Anhezini attended the Rio Grande do Sul assembly session — which had created a "Subcommittee on the Regulation of Electronic Smoking Devices and Protection of the Tobacco Production Chain" with the sector's support — to explain how vapes could turbocharge the struggling southern state economy. For this reason, the billions listed by the executive shone in the eyes of the state's politicians, who are home to units of tobacco multinationals in interior municipalities such as Santa Cruz do Sul and Venâncio Aires. The state also concentrates around 70,000 tobacco farmers, nearly half of the more than 138,000 tobacco producers in the country.
What Anhezini did not tell the state politicians, however, is that if the multinational decided to supply these vapes with nicotine extracted from Brazilian tobacco, the number of rural producers needed to supply this market would be minimal: just 93 tobacco-farming families, according to Joio's analysis — not the almost 12,900 jobs promised to the state deputies.
Based on internal documents from US e-cigarette maker JUUL — which include calculations of the tobacco demand needed to produce the brand's liquid nicotine — the report was able to calculate that fewer than 100 rural producers would be capable of supplying the demand projected by BAT for a device legalization scenario in the country. This assumes the multinational uses Brazilian tobacco for its nicotine; in products sold on other continents, the company mainly uses Indian suppliers.
Furthermore, BAT's e-cigarettes sold in Latin America are manufactured in China by the same companies that produce the illegal brands that supply Brazil's illicit market. In other words, they would not bring jobs to the country.
To arrive at this figure, the report started with FIEMG's consumption projections and applied the same formula used by JUUL in its internal calculations. It then used data from the Brazilian Tobacco Farmers Association (Afubra) to estimate how many tobacco farmers would be capable of satisfying demand for liquid nicotine for vapes of the same standard as VUSE, BAT's global e-cigarette brand.
In total, just 427 tonnes of virginia-type tobacco — output that 93 farmers can handle, on average — would supply the 12.85 tonnes of pure nicotine demanded by FIEMG's estimated consumption of around 63 million vapes annually.
In practice, a single rural producer could supply the raw material needed to power 676,000 electronic cigarettes, equivalent to the annual consumption of 37,500 smokers. You can consult Joio's full calculations here.
The labor demand is so low because, to produce pure nicotine, the substance's content in the leaf is extracted and purified. It is then mixed with chemicals and flavors that supply the liquids in these devices, while in the conventional cigarette much of it is lost in combustion. Overall, in a direct comparison between a pod and a pack, electronics contain 8 to 20 times less raw nicotine, JUUL's estimates reviewed by Joio indicate. If the index accounts for tobacco leaves, the vape needs up to 24 times fewer. This does not mean they are less harmful.
The report's estimate also assumes that the tobacco used in these products would be grown by tobacco farmers dedicated exclusively to nicotine production for vapes, along the lines of Universal Leaf multinational's plans to use tobacco farmers to supply JUUL with Brazilian nicotine. The US company's documents were obtained by the report through the Truth Tobacco Industry Documents website from the University of California, which compiles files gathered through US lawsuits.
Another possibility, in the event of device legalization, would be for BAT to use nicotine extracted from tobacco processing by-products — an input with a lower content of the substance, but much cheaper — following the same model adopted by Indian industries. There, nicotine manufacturers buy bidi tobacco dust — a tobacco typical of the country — directly from leaf processors. In this model, most of the profits stay with the industries and are not necessarily passed on to rural producers.
Even though already discouraging for the countryside, these job figures may be overestimated. This is because FIEMG starts from an "ideal" world in which vape smuggling ceases to exist. "This study assumes that the potential demand for electronic cigarettes — when their consumption is legalized — will be fully met by the legal tobacco industry," the Minas Gerais industry federation's survey says in its "limitations" section. A presentation with study data was made available by BAT to the report.
"They assume sales that I don't know if a legal product will achieve," assesses economist Roberto Iglesias, a World Health Organization (WHO) consultant and specialist in illicit tobacco trade, who evaluated the BAT/FIEMG slides at Joio's request. "They also talk about jobs and payroll, but hidden in that is the idea that a new vape production hub would emerge here, when what they would actually do is import Chinese parts and assemble them here."
The company's calculations estimate each "legal" e-cigarette would sell for R$ 150, but ignore the fact that illicit vapes cost as little as R$ 6 each wholesale in Paraguay, which is the source of most cigarette smuggling in the country, both conventional and electronic. When they arrive here, however, most devices are sold in ranges above R$ 100. Therefore, legalizing the product could also drive sales of cheaper illegal vapes, expanding consumption beyond the upper-middle class. "One possibility is a price war breaking out," says Iglesias.
BAT preferred not to answer any of Joio's questions about the survey and indicated that any questions should be directed to FIEMG. The entity stated in a note to the report that "the approach used in the study is based on economic scenarios that seek to evaluate the direct and indirect effects on the economy as a whole." "It is, therefore, a macro-level analysis, without going into specific production data by company," it said.
On the facade of its unit in Santa Cruz do Sul (RS), amid a rainbow-decorated logo, BAT claims to be "building a path of pioneering for a better tomorrow" (Photos: Isabelle Rieger/O Joio e O Trigo)
Since 2023, BAT has presented at least two different versions of the study with distinct promises to different audiences. First, vapes would create a R$ 7.5 billion market: the calculation estimated that 3.3 million Brazilians would consume 15 devices each per year. This version was repeated at events sponsored by the cigarette industry in the Brazilian press. In April 2024, the simulation rose to 3.5 million people, 18 vapes annually, and R$ 10.5 billion in revenue.
The multinational's figures, however, model vape demand as if its production were similar to that of conventional cigarettes. "The economic and social impacts analyzed are directly and indirectly linked to the increased production of the tobacco products sector, aimed at meeting potential demand for electronic cigarettes," the study presentation explains.
Instead of filters, paper, and shredded tobacco as in conventional products, electronic smoking devices (ESDs) use batteries, coils, and nicotine-containing liquids — extracted from tobacco or synthesized in pharmaceutical-grade manufacturing units — mixed with a range of chemicals and flavors.
Most of these factories are located precisely in Shenzhen, China, an industrial hub for electronics production. In Brazil, BAT's brands — such as Kent and Lucky Strike — use tobacco grown in the South of the country and are manufactured at its plant based in Uberlândia, Minas Gerais — a very different production chain.
At the same hybrid AL-RS session, Abifumo and BAT director Lauro Anhezini Júnior suggested that the ban on e-cigarettes creates a scenario of "health deregulation" in the country. "Nobody knows what is being consumed, people have no idea of the product's content or safety standards," he said. "When you don't have a rule, a product standardization, a health standardization, a public health problem arises."
The lobbyist's slides showed Brazilian news stories of vape explosions and reports of young people with device "oil" in their lungs. All the fault of the health deregulation of smuggled vapes, he suggested.
The same Chinese factories that produce some of the most popular illegal brands in the country, however, also manufacture VUSE, BAT's vape. In other words, the illegal and "health-unregulated" products flooding the Brazilian market have the same origin as those marketed by the multinational in Latin America. This is the case, for example, with Ignite — one of the main illicit brands sold in Brazil — which shares the same suppliers as VUSE, Joio found.
The illicit e-cigarette company is so well established in the country that, despite not officially selling vapes, it has already launched drinks and clothing brands, and has singer Gusttavo Lima as its spokesperson.
To discover this, the report purchased an Ignite device at a store in central Porto Alegre, confirmed its batch was genuine on the brand's official website (yes, illegal ESDs sold in Brazil come with anti-counterfeit codes), and then checked the manufacturer information on the packaging.
Today, most e-cigarette production is outsourced to Chinese companies. In Ignite's case, the "original product" is a generic (white label) version in which the company only inserts its brand. In this case, the manufacturer is VapeEZ Technology, based in Shenzhen, the Chinese city neighboring Hong Kong regarded as the "global vape capital."
Joio then tracked down any files available online that mentioned both VapeEZ and Ignite in the same document. The report found a 2025 internal "training" document from the brand's Russian subsidiary, detailing its production chain. "The [Ignite] liquid contains flavors and nicotine from major global manufacturers, who count British American Tobacco among their clients," the file states, highlighting Chinese companies VapeEZ Technology and Smoore Technology as Ignite's vape suppliers.
The report then decided to consult Paraguayan customs data — the main route for illegal vapes into Brazil — that included British American Tobacco, VapeEZ, and Smoore. The data were provided to Joio by the foreign trade intelligence platform ImportGenius. According to these figures, BAT imported to the neighboring country around 60,000 e-cigarettes from VapeEZ in 2024 and another 300,000 e-cigarettes from Smoore in 2023.
In the same period, between 2021 and 2023, Smoore also sold Paraguayan importers thousands of e-cigarettes (or parts for assembly in the country) under the Nikbar and Vaporesso brands — which, after Ignite, are among the most popular in Brazil's illegal market.
In addition to BAT, ImportGenius data show, one of the main importers of the Chinese company in the country is vape distributor Agatres, which is among those responsible for the marketing and smuggling of electronic cigarettes into Brazil, according to a Núcleo report from 2024. VapeEZ, meanwhile, did not sell devices to companies other than BAT, according to data reviewed by Joio.
The tobacco multinational admitted the commercial relationship with Smoore to the report. "BAT acquires its vaping products from different suppliers, including Shenzhen Smoore Technology Limited (Smoore), and the operation between BAT and Smoore follows processes independent of the activities the [Chinese] company maintains with other clients," the company said in a statement. "BAT states that it has no connection with VapeEZ and has never maintained a commercial relationship with the company," it said.
Joio, however, sent an email to one of the Chinese companies and mentioned having identified customs data indicating exports from the company to the British multinational. "VapeEZ focuses primarily on ODM products [meaning it manufactures products without logos and licenses that use to others] for many branded companies, such as Ignite," a representative of its sales team responded. "In addition, we are in communication with BAT on some new projects."
A recent study by the National Cancer Institute calculated that for every R$ 1 of profit the tobacco industry makes from conventional cigarettes, the country spends a total of R$ 5 on the direct and indirect costs of smoking, linked to illness, lost productivity, and death. There are no calculations yet estimating the negative public health impacts of vapes; however, the trend is that they will drive a rebound in conventional cigarette use. "You will have a portion of the population that starts using the electronic device and, once dependence sets in, they will migrate to the cheapest product, which is the conventional cigarette," says André Szklo from Inca.
Read BAT's full responses sent to Joio
BAT states that it has no connection with VapeEZ and has never maintained a commercial relationship with the company.
BAT acquires its vaping products from different suppliers, including Shenzhen Smoore Technology Limited (Smoore), and the operation between BAT and Smoore follows processes independent of the activities the company maintains with other clients.
Our vaping devices undergo rigorous quality testing.
Each product is subjected to more than 1,000 hours of testing, ensuring excellence in performance and safety.
Furthermore, our devices are tested and certified by independent laboratories, ensuring that each unit meets the highest standards and complies with local legislation before reaching consumers.