Imperial Tobacco has joined its fellow manufacturers JTI, BAT and PMI in signing a co-operation agreement with the European Commission and the European Union (EU) to combat the illicit trade in tobacco.

As part of the new 20-year agreement, Imperial will be required to implement rigorous controls to prevent the illicit trade in its products, such as by monitoring whether any of its customers are involved in feeding the black market. It will also have to pay hefty fines if any of its products are found smuggled into the EU.

Chief executive Alison Cooper said the agreement would help combat the problem, which costs legitimate retailers and government billions of pounds in lost revenue each year.

The news comes as customs officials revealed that they were closing in on the Chinese gang behind a huge counterfeiting operation in Scotland.

The gang are importing raw tobacco to the UK, and sending it on to a string of bedsit factories for packaging via parcel post and courier services. In the last six months alone more than 15 tonnes of counterfeit tobacco and packaging have been seized in raids across the region.