An illegal tobacco factory believed to be producing £700,000 of fake cigarettes per day has been raided . It was shut down in Derbyshire after an investigation by HM Revenue and Customs , who miss out on billions a year in tax because of the illicit trade . Tax officials , along with Derbyshire Police , dismantled the suspected illicit tobacco factory at an industrial storage unit near Derby city centre . More than 1.2 tonnes of tobacco , worth an estimated £283,000 in duty and taxes , was seized during the operation . Scroll down for video . Raid : This Derbyshire illegal cigarette factory has been shut down , and was capable of producing £700,000 of cigarettes per day . Stash : The factory hidden at an industrial storage unit near Derby city centre held more than 1.2 tonnes of tobacco . Afterwards , Stuart Taylor , Assistant Director , Criminal Investigation , HMRC , said : 'Tobacco fraud costs the UK £2 billion a year in lost tax and this factory alone had the potential to rob taxpayers of hundreds of thousands of pounds a day in evaded excise duty . 'In addition to significant revenue loss , illicit tobacco products damage legitimate businesses and the trade is unregulated making cheaper tobacco more readily available to the young and vulnerable . ' A 38-year-old man from the city of Derby was arrested and has been released on bail until June 2015 . Investigations are ongoing . In the last two years , almost 3.3 billion cigarettes and over 800 tonnes of illicit hand-rolling tobacco have been seized and 593 criminals involved have been prosecuted . In that time warehouses linked to other tobacco seizures were all part of a suspected network of organised criminals . Other swoops were made in Essex , Preston and Blackburn - netting 11 tonnes of raw tobacco in total last year . A warehouse in Bury was raided by HM Revenue and Customs officers at the same time as two domestic houses and a garage in the area , which were all searched as part of Operation Eel last April . The tobacco was found wrapped in boxes and bags and is believed to have been illegally brought into the UK without excise duty being paid . Held : A 38-year-old man from the city of Derby was arrested and has been released on bail until June 2015 over the bags full of tobacco found . HMRC said it was 'in the process ' of being mixed with chemicals at the unit by a gang and converted into hand-rolling tobacco . How many illegal cigarettes are in the UK ? Border officials say that close to 50 million cigarettes are seized each month - but the overall figure is much higher . What do they cost ? Illegal packets of cigarettes can cost between £3 and £4 - less than half the price of legal packs . How much revenue is lost ? £2.1 billion was lost in the last year because of illegal tobacco trade . Of the average pack of fags , how much of the price goes to the government in tax and duty ? On a typical pack of 20 cigarettes the total tax burden is £6.17 on typical £7.98 pack . Dry , harvested tobacco leaves are believed to have been imported from tobacco growing country then processed using and white vinegar , and flavoured with vanilla , according to HMRC . 'There are no controls over what is mixed into counterfeit cigarettes and by buying it smokers are funding international organised crime gangs , ' an HMRC spokesman told MailOnline . 'We are cracking down on it . ' Fake printed wallets would be filled with tobacco and used to dupe customers into believing they were genuine . Sandra Smith , assistant director of criminal investigation 's at HMRC , said : 'Illicit tobacco factories hidden in our communities are packaging low quality tobacco and I 'd urge people to be wary . 'Cheap tobacco may seem like a bargain , but there are no controls over what is mixed into the product and by buying it smokers are funding organised crime gangs . ' Sorry we are not currently accepting comments on this article .
Cigarette factory in Derby shut down and a man , 38 , was arrested . HM Revenue says illegal tobacco trade costs around £2.1bn in lost tax revenue .