Illicit markets cost Brazilian industry more than R$107 billion a year, according to single-source reporting from Poder360 based on a survey by Brazil’s National Confederation of Industry (CNI), the country’s main industrial lobby group.
The figure combines R$39.1 billion in direct lost net sales revenue with R$68.5 billion in security spending by companies. The total is roughly USD 19 billion at recent rates, an approximate conversion.
The Scale of Losses
CNI’s Special Brazil Legal Survey found that about one-third of industrial companies said they had been directly affected by illegal activity in the previous two years. Among affected firms, 50% cited gross revenue losses as the main negative impact.
Loss of market share came next, cited by 30% of affected companies. Higher spending on security was cited by 28%, showing that companies face both direct damage and higher operating costs when illegal markets expand.
The survey points to a broad problem for Brazil’s formal economy: firms that comply with tax, safety and technical rules must compete with theft, smuggling, counterfeiting and non-compliant products. CNI argues that this creates unfair competition and reduces revenue for legitimate manufacturers.
Smaller Firms, Higher Exposure
About 31% of companies said their activities had been harmed. The share was slightly higher among medium-sized and large companies, at 32% and 33%, compared with 25% among small firms.
But CNI said the relative burden may be heavier for smaller businesses. Fabrício Silveira, CNI’s superintendent for industrial policy, said the average negative impact amounted to 0.6% of annual net sales revenue for small firms, 0.8% for medium-sized firms and 0.4% for large companies.
“With leaner financial structures, less capacity to dilute fixed costs and more restricted access to credit and protection instruments, small businesses tend to be more affected, mainly through unfair competition,” Silveira said, according to Poder360.
Cargo Theft Leads
Cargo theft was the most commonly cited offense among companies affected by illegal markets. CNI said 32% of firms reported being directly affected by it.
The problem is acute in Rio de Janeiro state. According to Poder360, the Rio de Janeiro State Federation of Industries estimated losses of R$314 million in 2025, with an average of eight trucks attacked per day.
The second most cited problem was the sale of products that fail to comply with technical regulations, mentioned by 29% of companies affected by illegal markets. This includes goods sold without mandatory certification, with inadequate labeling or outside legally required quality and safety standards.
Among medium-sized and small companies, non-compliance with technical rules was the leading problem, affecting 33% and 26% of impacted firms, respectively. Silveira said such practices can pose risks to consumers and amount to unfair competition against formal industry.
Security Costs Outweigh Direct Losses
The survey found that prevention costs are higher than the losses directly caused by illegal activity. Industrial companies’ spending on security, including property and cyber protection, equaled 1.1% of net revenue and totaled R$68.5 billion.
CNI warned, however, that investment in digital security remains limited. Silveira said about 77.1% of Brazilian companies allocate 1% or less of their budget to cybersecurity, even as threats become more sophisticated.
Companies surveyed said the main answer should be more inspection and enforcement. Seventy-seven percent cited stronger oversight and controls as the top measure against illegal activity, while 46% supported intelligence operations and 36% favored tougher legislation.
State public-security agencies, including civil and military police forces, were identified by 41% of companies as the institutions most in need of reinforcement. The Federal Police and Brazil’s Federal Revenue Service followed, cited by 38% and 36%, respectively, reflecting concerns over organized schemes, transport routes, ports, airports and borders.