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Bootleg tobacco and alcohol are costing Britain's corner shops and convenience stores more than £1.2 billion a year, according to new research.

Estimates from the survey, carried out with more than 500 retailers for trade magazine Independent Retail News, show that over a 12-month period the average retailer lost £28,472 as a result of smuggling.

Shopkeepers are also losing out on other sales because many customers are no longer buying their cigarettes from their local store. Nearly half of retailers (48 percent) said regular customers were no longer buying cigarettes from them, with nearly 27 percent saying those customers only sometimes or rarely used their store at all.

Counterfeit cigarettes are very much on the increase, with a quarter of retailers saying they have been offered them in the past year compared with 15 percent in 2003. Customs minister John Healey said, "The results of the survey are disappointing, especially given the improvement shown in the last two surveys. The government takes smuggling of alcohol and tobacco very seriously, which is why we've put extra officers on tobacco smuggling and why we are introducing tax stamps on spirits in 2006, following liaison with the spirits industry."

In other international news, British supermarket and convenience retailer Tesco has made its first move into China by buying a 50 percent stake in Chinese hypermarket firm Hymall for 140 million pounds.

Taiwan's Ting Hsin, which also owns China's largest instant-noodle maker, is selling the stake in the chain of 25 hypermarkets to benefit from Tesco's better supply-chain systems, store operations and product development, the company said on Wednesday.

International expansion forms a key part of Tesco's strategy. Along with opening more convenience stores in its main U.K. market, Tesco has also expanded rapidly in areas such as Asia and central Europe.

"China is one of the largest economies in the world with tremendous forecast growth and a market we have researched extensively over the last three years," Tesco CEO Terry Leahy said in a statement.
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