10 September 2012 Last updated at 07:08 ET

Tobacco smuggling: Three arrests in Aberystwyth

Three men have been arrested and 4.5m counterfeit cigarettes seized by customs officers in mid Wales.

HM Revenue & Customs (HMRC) said its officers discovered the fake 'Vess' branded cigarettes on an industrial estate in Aberystwyth, Ceredigion.

Their sale would have cost £1m in lost revenue, said HMRC.

Two of the men, one in his 30s, the other in his 40s, have been bailed with a man in his 40s from Berkshire. A fourth man is assisting with inquiries.

Adrian Farley, HMRC's assistant director of criminal investigation, said the black market in tobacco was having "a devastating impact on honest retailers".

"We take tobacco smuggling very seriously," said Mr Farley. "It's costing the British taxpayer around £2bn a year in lost revenue to public finances."

Mr Farley said cheap tobacco products often seemed attractive but were unlicensed and unregulated.

"Those involved are not concerned if they are selling to underage children and young people," he said.

HMRC encouraged anyone with information on tobacco smuggling to contact the Customs Hotline on 0800 59 5000.