Customs seized 101 million smuggled cigarettes destined for Britain yesterday in a raid that highlights the huge black market in contraband tobacco driven by the highest price of smoking in Europe.

The cigarettes were recovered from three warehouses in Liège in eastern Belgium in a coup described as one of the largest in a single operation in the European Union.

It will, however, make only a small dent in the ten billion cigarettes estimated to be slipped into Britain every year, which Revenue & Customs believes cost the Treasury up to 2.5 billion annually in lost tax.

“This is a record haul and a significant breakthrough,” said a spokesman for Belgian Customs. Five men were arrested in the raid.

It was unclear last night whether the cigarettes had been bought cheaply in Eastern Europe or were counterfeit, in which case they would most likely have come from Russia, a big source of fakes found in Britain and a known source of overland smuggling via Belgium.

The main origin of fake cigarettes in Britain is China, although the most likely route for Chinese tobacco products is by sea.

The vast covert trade is likely to be fuelled by the ever-increasing price of legitimate cigarettes in Britain, which a Treasury survey has shown to be the highest in Europe. Taking the average price of a packet of 20 in Britain as £5.23, the next highest is in the Irish Republic at £4.34 followed by France at £3.36.

Genuine cigarettes can be bought for as little as 42p per packet in Latvia and 73p in Lithuania. With untaxed cigarettes selling for about £2.50 in Britain, the potential profits are huge.

A spokesman for Revenue & Customs said that up to 19 per cent of all cigarettes in Britain were smuggled into the country to escape tax. Roughly half of these are fakes and half trafficked from cheaper countries.

He said: “Containers seized at ports usually contain around seven to nine million cigarettes, so 100 million is a very good seizure. Bootleg and counterfeit cigarettes are usually sold at car boot sales, pub car parks or street markets, but some do find their way into genuine retailers.”

He added that Revenue & Customs had worked with tobacco companies to develop covert markings on cigarette packets that are only detectable with special equipment used by Customs or trading standards officers.

He said: “Always remember that, if the price of a packet of cigarettes seems too good to be true, it will be.

“Cheap cigarettes are smuggled or fake and can contain five times more cadmium, 5.8 times more lead, 160 per cent more tar, 80 per cent more nicotine and 133 per cent more carbon monoxide.”

In the three-year period from January 2004 Revenue & Customs seized six billion smuggled cigarettes in Britain, which they estimate to be less than 20 per cent of the total brought into the country illegally in that time.

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