Tobacco with a street value of £20,000 has been seized following raids at three shops in Ilkeston.
The raids on shops suspected of selling counterfeit cigarettes were part of a crack down by trading standards officers from Derbyshire County Council and Derbyshire police.
A sniffer dog helped locate more than 30,000 cigarettes, plus 560 pouches of hand rolling tobacco weighing 28kg.
The tobacco had been hidden in security door panels, hollowed-out steps on staircases and a panel at the bottom of a drinks refrigerator.
Three people have been arrested, questioned and released on bail pending further enquiries.
Councillor Dave Allen, the council’s cabinet member for health and communities, said: “This is the second time we’ve used a sniffer dog to find tobacco and it sends out a clear message to retailers that there’s no hiding place for people selling counterfeit or non-duty paid tobacco.”