RETAILERS in the region considered closing their shops as a result of lost sales to tobacco smuggling, it has been claimed.

According to a survey by the Tobacco Alliance, 21 per cent of shop owners in the North-East and North Yorkshire were so dismayed with cigarette sales they thought about quitting.

A total of 32 per cent said they would have to consider cutting staff to make ends meet.

The Alliance, which represents 17,000 independent retailers in the UK, also found that nationally 20 per cent of shop owners have seen fake tobacco products sold in pubs, clubs and car boot sales, while eight per cent were aware of counterfeit product being available in shops.

Darlington retailer John Abbott, Tobacco Alliance spokesman for the North-East, said: "These findings are extremely disturbing and demonstrate how much the comparatively new problem of fake tobacco products is affecting our society.

"The livelihoods of independent shopkeepers, like me, all over the UK are already under threat because of the effects of tobacco smuggling on our sales.

"The ready availability of counterfeit goods will only add to these problems."

A total of 74 per cent of traders nationally said the Government should reduce or freeze the tax on tobacco to tackle the problem and bring tax levels more in line with the EU. Ninety per cent said the Government was not doing enough.

The alliance runs a campaign, Retailers Against Smuggling, to raise awareness about the issue.

Mark Francois MP, shadow economic secretary to the treasury, said: "This survey raises an extremely important issue.

"Not only is the sale of smuggled tobacco having a damaging effect on independent businesses but it is also apparent counterfeit tobacco seems to be particularly rife."