The poll of 1,114 retailers by the Tobacco Retailers Alliance also found that 56% of shopkeepers are aware of smuggled tobacco being sold in their area and 40% of those know of smugglers supplying under-age smokers.
Sixty-nine per cent predicted that cross-border shopping and tobacco smuggling would get worse over the next 12 months, and 65% said reducing or freezing taxes would help to reduce tobacco smuggling and cross-border shopping.
The findings came as the government considers a move to ban all tobacco displays in shops in an effort to reduce youth smoking.
Ken Patel, national spokesman for the Tobacco Retailers Alliance and a shopkeeper in Leicester, said: “If smokers aren’t aware a shop such as mine sells tobacco, they are going to be all the more tempted to get it from car boot sales or sellers on street corners. Why wouldn’t they, when smugglers can sell at half the price that I can?
“If they force us to sell it from under the counter, they are forcing the whole trade under the counter and the sale of dodgy tobacco will only increase.”