Wholesalers have warned that increasing sales of black market alcohol will hit them hard at Christmas.

Criminals are evading duty by illegally diverting non duty-paid products destined for export from UK warehouses and offering retailers discounts of up to 20% on wholesale prices.

John Murphy, director general of the Federation of Wholesale Distributors, said: "It would be impossible to offer these kinds of prices if they were sourced at normal, or even promotional, prices and the excise duty had been paid."

Peter Mullen, manager of Parfetts' Stockport depot, said that it was becoming increasingly difficult to compete with the criminals. "We are struggling to sell some of our main beer and lager lines, as we can't compete with the knockdown prices some retailers are being offered in this market," he said.

A spokesman for HM Revenue & Customs said it would be stepping up its efforts to combat the problem in the run-up to the festive period.