A RECORD-SETTING sniffer dog was behind the seizure of almost 50,000 illegal cigarettes and 15kg of rolling tobacco stashed in a secret compartment in a Herefordshire shop.

Trading Standards busted a sophisticated operation – which used electro-magnets to help conceal a false wall panel – after being tipped off by ‘Phoebe’.

The rescue dog-turned-super sleuth is making quite a name for herself within the booming illicit cigarette industry, having last month sniffed out the biggest haul ever recorded in the UK – a Newport stash with a street value of around £500,000.

A billion-pound UK industry with links to organised crime, the goods seized in Herefordshire last month would have amounted to £17,000 in lost duty alone.

The packs – sold at around £5 less than legitimate cigarettes – are labelled with foreign packaging to make customers think they have been imported, or smuggled, into the country.

In reality they are simply fakes, containing unregulated, and sometimes toxic, substances.

While Herefordshire jailed its first cigarette fraudster for four months last year, the profits at stake are significant; newsagents can generate around £5,000 a week selling illicit packs.

Even charging £3 a pack will see shopkeepers clear £2 in profit – compared to around 25p a pack earned by legitimate sellers offloading packs at £7-£8.

For this reason Herefordshire’s Trading Standards Office has been pushing for stricter penalties that would give them the power to board up offending stores.

In November Nawzad Sherzad Said was jailed for selling cigarettes under the counter at the Instanbul Mini Market in Leominster, after being caught with 94, 000 of them.

However the property changed hands and Tim Thorne, Herefordshire’s prinicpal trading standards officer, said the new proprietors had since been busted for the same offence.

He said: “There is no deterrent – these people are making a fortune.

“It’s worth them risking a fine or a small jail term.

“The damage to the small honest retailer is severe.”

The damage to the taxpayer is equally painful; the UK industry is estimated at costing every worker the equivalent of £100 in tax every year to cover the money lost to cigarette fraudsters.

And the money at stake has meant those selling illegal cigarettes have developed increasingly covert methods to hide their stash.

“We knew they had illegal tobacco,” said Mr Thorne. “Because we knew they had been selling it.”

But an unsuccessful raid of the premises in February led to the team returning last month.

While the dog again detected something near a seemingly blank wall, it was a stroke of luck that revealed the shopkeeper’s secret ‘hide’.

Mr Thorne said: “I switched off an empty plug socket – it’s a force of habit.

“But that switch was wired to a set of strong electro-magnets, turning it off released a panel behind the cupboard the dog had been interested in.”

It is a story Phoebe’s dog handler Stewart Phillips has seen play out with alarming regularity - illegal tobacco seizures now account for around 75 percent of his business with BWY Canine.

Mr Thorne said: “These criminals are so sophisticated now, it is a waste of time going in without a dog – unless you’re going to knock down every wall in the shop, you won’t find it.