A new wave of smuggled and fake tobacco could flood the UK as a result of a display ban.

Evidence from the Republic of Ireland reveals legitimate sales have taken a 5% hit since the ban was implemented. And manufacturers and retailers claim street sellers appear to be able to ply their trade with little police interference.

The Superquinn chain has reported a 5% drop in cigarette sales since the display ban was introduced on 1 July. "It's the visibility factor," said a spokesman. "If customers can't see brands displayed in stores and, as things are, they can't they're unlikely to buy."

Shops in the Republic charge an average of 8.55 for a pack of 20, while the street price is generally between 4 and 6.

Imperial Tobacco corporate affairs manager Ian Watkins said the rise in street selling of both smuggled and counterfeit cigarettes in Dublin had been "extraordinary". Some fake packs were so convincing even he had struggled to tell them apart, he added.

The UK tobacco industry had greatly reduced smuggling by working with Customs, but this could be undermined by the introduction of a display ban in 2011, Watkins said.

"Not so long ago, 90% of the rolling tobacco smoked in the UK was smuggled," said Watkins. "This has been reduced to 65%. There is more to be done, obviously, but a display ban just makes this harder."

JTI UK managing director Daniel Torras added that increased availability of illegal tobacco would make it easier for children to start smoking. "A ban in the UK could allow organised crime to infiltrate the legal supply chain with counterfeit cigarettes, as well as permit tobacco smugglers, who don't care what age their customers are, to sell even more illegal products," he said.

Just this week, Customs officers seized six million counterfeit cigarettes from a lorry parked in an industrial unit in Aldridge in the West Midlands. They were stashed in boxes labelled as mixed vegetables.

Duty and VAT of £500,000 had not been paid on the tobacco, which had been manufactured in unregulated factories.