Washing powder is one of the latest commodities being smuggled across the border in Northern Ireland, MPs were told on Wednesday amid warnings that the region could become a significant gateway for mislabelled meat and other food to enter the UK post-Brexit.

Parliament’s Brexit select committee was also told that horsemeat-type scandals could flourish post-Brexit because price differences between Northern Ireland and Ireland.

“If we have a border with tariff differentials, then you can see, for example, cheap meat coming in from Brazil would be repackaged. Remember Horsegate? [It would be] passed off as Irish into the market at a higher price and I don’t think those people would be too concerned about food hygiene standards,” said Declan Billington, vice chair of the Northern Ireland Food and Drink Association.

In the current regime just three categories of goods, alcohol, tobacco and fuel have different duties north and south of the border, but the decline in sterling and criminal opportunities to use Ireland as a gateway to the UK have been identified by local police as drivers of smuggling.

“There are reports of washing powder now making its way into smugglers’ interests,” Stephen Kelly, chief executive of Manufacturing Northern Ireland, told the committee.

He told MPs that smugglers were agnostic about the goods they would “trade in” as was proven by smuggling gangs exploiting the EU border between Norway and Sweden.

“The biggest problem they had was garlic. When you begin to create price differentials, it becomes an attraction to people,” he said.

Billington was being questioned after a series of MPs including the DUP’s Sammy Wilson and Brexiter Jacob Rees-Mogg concluded that there would be no onus under World Trade Organization rules to put up any extra border infrastructure in a no-deal Brexit scenario.

Business leaders pointed out if there was a free-for-all with no checks, Northern Ireland would turn into a smuggler’s paradise, not just for gangs trading south to north but gangs wanted to sell goods to mainland Britain.

“It’s got to the point now that the launderers are now making so much money that they are now exporting laundered diesel to [Britain] and those drums of diesel are being shipped un-manifested on ferries, so there’s a whole risk issue there too,” said Seamus Leheny, policy director of the Freight Transport Association.

Fuel laundering was a massive business during the Troubles and centred on the resale of cheaper agricultural fuel as motor fuel.

It was estimated the UK exchequer was losing between £250m and £350m a year and half the filling stations in Northern Ireland were selling their washed product.

The drop in sterling and the difference in prices of fuel, even with new dyes to identify it as illicit, means there are opportunities for criminals, Leheny added, saying it had “decimated” the freight trade with rogue fuel costing as little as 70p a litre compared with legitimate fuel at around £1.35 a litre.

Billington said the concern was that while there were only three commodities with price differentials in the current regime, once Britain left the EU there could be many more.

“If you create 30 product groups you will create a much larger set of opportunities. The bigger the opportunities the more players that move into the market,” he said.

PSNI and Gardaí operations show that criminals from all over the world are using Ireland as a potential gateway into the UK including gangs from Russia, Lithuania, Africa and Asia.