More than 200,000 cigarettes and 28 kilos of hand-rolling tobacco, all believed to be illicit, have been seized in Stockton-on- Tees.
The haul is estimated to be worth £80,000 in unpaid duty.
HM Revenue and Customs (HMRC) discovered 213,940 cigarettes and 28 kilos of hand-rolling tobacco at a storage facility on 14th September.
A further 2,464 cigarettes and one kilo of hand-rolling tobacco were seized at a shop in Middlesbrough.
The men, aged 36 and 30, from Stockton and Middlesbrough, were arrested in connection with the seizures and interviewed by HMRC.
Both men have been released pending further investigation.