It is the evil trade that is hoodwinking consumers, putting health at risk, robbing billions of pounds from the taxman and seriously harming local small businesses.

Yesterday the Daily Echo revealed how our exclusive research in the city had revealed a flood of illegal and fake tobacco products were openly being sold by some unscrupulous traders and individuals.

Our independent undercover investigators had no trouble in buying packets of cigarettes and roll you own (RYO) tobacco at a fraction of the true cost of legal, branded products.

We reported how many of the fake fags were actually made of poor-grade tobacco and included such ingredients as rat droppings, human excrement, dead insects, plastic and asbestos.

And we told how there are fears that the trade in illegal and fake cigarettes was funding organised crime and even international terrorism.

Today we look at how the trade is costing small shop owners who are working within the law thousands of pounds as smokers turn to cheap alternatives, often not understanding the dangers.

HMRC estimates that £2.4 billion in tax revenue was lost because of tobacco smuggling in 2015/16.

Since the turn of the century (2000/1 to 2015/16) the total revenue loss is £41 billion, money that could be used to build hospitals and pay for schools as well as social care.

And illegal tobacco not only represents a loss of tax revenue to the Treasury but also a loss of turnover and profits to the UK’s estimated 57,000 retailers that sell tobacco products with 6,900 here in the South East.

It’s not difficult to understand why smokers would seek cheap tobacco products.

Examples discovered here in Southampton included a counterfeit packet of Amber Leaf tobacco that was sold to a researcher for £4 when its normal cost would be around £16.60 from legitimate traders.

A pack of 20 Mayfair cigarettes was handed over for just £3 when the legitimate cost would be £8.39.

UK taxes on tobacco, and therefore prices, are among the highest in the world, and have been so for many years. This has led to many smokers seeking out cheaper alternatives, sometimes purchasing products when they go abroad, or from ‘black market’ channels.

For example, a 10g pack of roll-your own (RYO) costs around £3.90 in the UK while 50g of RYO can be bought in Belgium for around £4.35 – five times the quantity for only a little bit more.

Test purchasing carried out as part of our research has shown illegal cigarettes are on sale in Southampton for as little as £2.50 per 20, with RYO on sale for £4 per 50g.

And the illegal trade in tobacco makes it harder to ensure that children are not able to buy cigarettes.

The Daily Echo has been working with tobacco firm JTI in its investigations, which has an on-going programme of exposing the illegal tobacco trade.

Steve Wilkins, JTI anti-illegal trade operations director, said: “The vast majority of retailers are the “Gatekeepers” for age-restricted products and they help to ensure that children do not get hold of tobacco products.

"Unfortunately, the criminals who sell illegal tobacco within our communities do not operate a ‘no ID no sale’ policy and will sell to all-comers, including children.”

Mark Yexley, media relations manager at JTI, said: “Illegal tobacco products that are peddled within communities pose a risk to the future existence of hard working convenience store owners, and anyone who buys counterfeit cigarettes may be contributing to the decline of the high street.

“When it comes to the sale of age-restricted products, we must foster a culture of ‘no ID no sale’.”

A spokesperson for HMRC commented on the issue: “We estimate that tobacco fraud costs the government around £2 billion a year – money that could be used on services that we all use such as health care. So a cheap smoke isn’t victimless – it can cost us all dear.

“Smuggling isn’t just a few cigarettes on the quiet. That’s why we are increasing our efforts to tackle smuggling and retailers and the public can play a vital role in this fight.

“HMRC works tirelessly to pursue those who smuggle tobacco and cigarettes for profit. We do this to protect the livelihoods of honest retailers.”

Anyone with information about this type of crime should contact Crimestoppers anonymously on 0800 555 111.