June 22, 2026
Reading time • 5 min
Illegal trade costs the retail sector R$ 179 billion annually
The rise of illegal trade in Brazil has increased losses for the retail sector, reduced government revenue, and posed new challenges to the competitiveness of businesses operating within the law. According to a study presented by the National Confederation of Trade in Goods, Services, and Tourism (CNC), the illegal market causes annual losses of R$ 179.2 billion in formal sales, an amount equivalent to about 1.5% of Brazil’s Gross Domestic Product (GDP).
The data was presented by Fábio Bentes, chief economist of the CNC’s Executive Management Office for Analysis, Economic Development, and Statistics, during the panel discussion “Institutional Challenges in Defending Brazil’s Legal Market,” held this Thursday (18) at the Brasil Legal Seminar at the Federation of Industries of the State of São Paulo (Fiesp). The event brought together representatives from the National Congress, the National Council for Combating Piracy and Intellectual Property Crimes, business organizations, and experts to discuss measures to combat piracy, smuggling, and other practices that undermine the formal market.
At the event, Bentes presented the study “Illegal Trade in the Brazilian Retail Sector—The Economic Impact on Your Business,” prepared by the CNC to quantify the losses caused by the spread of illegal activity in the country. In addition to direct losses in formal retail sales, the survey points to tax evasion totaling R$ 74.8 billion per year—funds that fail to reach public coffers and could be invested in areas such as health, education, security, infrastructure, and development policies.
During his presentation, the economist stated that the problem has become one of the main concerns of the productive sector, especially due to its effects on competition. “Retail, services, and tourism have been suffering greatly from this issue of piracy and illegal trade. It is a priority issue for the sector because it directly affects companies’ competitiveness and generates very significant economic losses,” he said.
According to Bentes, illegal trade has nearly doubled in Brazil over the past 15 years, increasing the pressure on companies that bear the burden of taxes, labor costs, health regulations, regulatory costs, and safety requirements. In practice, the expansion of this market creates an uneven playing field between legal products, which are subject to formal rules, and goods that enter or circulate in the country without the same level of oversight.
The impact, according to the CNC, is not limited to retail. The decline of the formal economy reduces business revenues, squeezes profit margins, limits investments, weakens the creation of formal jobs, and decreases tax revenue. “The growth of illegal trade is not just a retail problem. When the formal economy shrinks, the country collects less tax revenue, invests less, and grows less. It is an issue that affects all sectors,” stated Bentes.
The study also highlights the risks to consumers. According to the economist, smuggling and piracy have expanded to include a growing variety of products, including goods that require health inspections, technical certifications, and minimum safety standards. In such cases, in addition to economic damage, there is a potential threat to public health and the safety of the population. “The problem isn’t just economic. There are also risks to consumer health and safety when products enter the market without any controls or oversight,” he noted.
« Home
