The Tobacco Retailers Alliance said 71% of those polled admitted to knowledge of the local black market.
It also found that nearly one in four corner shop owners, or 23%, have awareness of smugglers selling to underage smokers.
Meanwhile one third are aware of proxy purchasing at their store, which is when someone over 18 buys for someone under 18.
The organisation behind the survey represents 26,000 independent shop owners across the UK.
Its Northern Ireland spokesman, Ballymena trader John McKeown, said tough economic times have increased the “temptation” to deal in smuggled goods.
“In this economic climate, it’s understandable there’s a temptation to buy tobacco from smugglers who charge half what I charge,” Mr McKeown said.
“The reason smuggling is so widespread in the UK is because the government puts so much tax on tobacco that it raises the legitimate retail price sky high.
“If a smuggler wants to offer his customers a half-price deal, he will make more profit in the UK where the price is so high, than he would anywhere else in Europe, bar Ireland.”
He added that some smugglers sell counterfeit goods containing unpleasant additives.
“Smokers need to know that if it sounds too good to be true, it probably is,” he said.
“The cigarettes may turn out to be fake, have rat droppings or saw dust in them and be pretty unpleasant to smoke.
“By the time you’ve found that out, your smuggler will have moved on. So if you buy from smugglers, you don’t know what you’re going to get.”
The UK-wide survey found that Wales has the largest number of shopkeepers aware of smuggling, at 73%, while the national average was polled at 58%.
The Tobacco Retailers Alliance say the black market causes a loss to the Treasury of £8.2m per day.
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