The criminal and economic impact of tobacco smuggling has been discussed at a Conservative Party conference fringe meeting organised by the party's Northern Ireland branch.

Representatives from the Tobacco Alliance, including County Antrim retailer Audrey Wales addressed the meeting in Bournemouth on Wednesday.

Speaking to BBC News Online, Northern Ireland Conservative Party vice chairman Terry Dick, who addressed the meeting, said: "This is a very big issue. We are trying to highlight the level of fraud and the threat these smugglers pose to law and order.

"The sale of smuggling cigarettes is funding both paramilitary organisations in Northern Ireland, and organised crime in Britain.

"And government figures show that smuggling is resulting in the loss of �3.5bn to the Treasury every year, which is the equivalent of �150 for every household in the UK.

'Terror funding'

"So we are calling on the government to take measures to reduce smuggling, just as we have been pushing for measures to combat fuel smuggling which is also funding terrorism in Northern Ireland."

Tobacco Alliance represents 42,000 retailers in the UK. Its national spokesman Paul Mason is also to address the Bournemouth meeting.

Earlier this year, the Tobacco Alliance lobbied MPs at Westminster to call for a reduction in the tax on cigarettes, which it has said is partly to blame for an upsurge in smuggling.

The increase in smuggling has left many small shopkeepers on the verge of collapse as they lose the trade in both tobacco and confectionary products as the public chose to buy from cheaper illegal sources, the Alliance says.

Crime gains

The Commons' Northern Ireland Affairs Committee published a report on organised crime in the province, earlier this year, which said paramilitary groups were making up to �18m a year through smuggling, extortion and armed robberies.

A number of major seizures of smuggled cigarettes in Northern Ireland and the Republic of Ireland last year were linked to paramilitary organisations, including the dissident republican Real IRA.

Last November, police said they believed 60 million cigarettes seized from a ship in Dundalk in the Republic of Ireland, and from a ship at Warrenpoint, County Down, had been smuggled by the Real IRA for sale in Northern Ireland or Britain.