A lack of action by many UK councils and Trading Standards on counterfeiting and piracy is giving criminal gangs a free rein, a leading coalition of retail trade associations and enforcement organisations has claimed.

Insufficient regulation of car boot sales, markets, funfairs and street vendors was allowing the illicit trade to flourish, Lavinia Carey, director general of the Alliance against Intellectual Property Theft, told delegates at the Local Government Association group conference.

A recent survey by the Alliance suggested that 23% of small and medium-sized businesses had been negatively affected by the counterfeiting of consumer goods.

Earlier this month, retailers in Kent had been shocked to learn that a funfair offering counterfeit and non-duty paid cigarettes as prizes had been allowed to continue operating, despite calls to Trading Standards.

The unsupervised game cost 20p to play and was freely accessible to children.

One independent retailer, who visited the fair at its pitch in Sittingbourne, said: "If I was caught selling illegal cigarettes I could be fined up to £5,000, whereas these criminals are getting away with it."