Booze cruisers and smugglers of alcohol and tobacco cost independent retailers in the UK an average of £20,000 each last year.

The figures mean the average independent retailer lost nearly £220,000 in the past five years, said trade magazine Independent Retail News.

The magazine claims the independent retail sector has lost £10 billion in the same period - the equivalent of the combined annual sales of all chocolate, crisps, snacks and soft drinks.

Interviews with more than 500 independent retailers in England suggested the worst affected areas of the UK were the Midlands, where average losses per store for the past 12 months were £37,885, followed by Wales (£31,139) and London (£25,675).

The Government's decision last October to increase the amount of alcohol and tobacco people could bring into the country was also having a serious impact on retailers.

Some 34 per cent of small stores had seen a further fall in sales since the levels were raised.

However, Customs and Excise minister John Healey said the research showed losses to retailers went down from £36,000 in 2001 to £20,000 last year.

He said: "As this survey acknowledges, the worst days of smuggling spiralling out of control are over. Customs is determined to build on its success to ensure they put this harmful and illicit trade into decline."

Richard Siddle, editor of Independent Retail News, said: "Our local stores cannot continue to haemorrhage cash on this scale and stay open.

"They are fed up and frustrated the Government cannot get the smuggling problem under control.

"Its decision to increase allowances has been a green light to bootleggers to go and fill their boots."