The trade in counterfeit and contraband cigarettes has been a problem in Brazil for many years, with cigarettes crossing the border from countries such as Paraguay and Uruguay at an alarming rate. As Sergio Villas Boas of Cibahia notes: "This is a big problem, especially as it puts pressure on the low price end of the market supplied by smaller manufacturers." While the market share of contraband cigarettes has declined from its peak of 38% in 1998 to 32% in 2003 and 30% in 2004, it is still a major problem for all concerned in the tobacco industry.
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