Counterfeit tobacco packaging and machinery was discovered during a raid on a farm.
HM Revenue and Customs (HMRC) officers arrested one man after seizing equipment at a farm in Halstead last Wednesday.
Officers dismantled the tobacco processing plant and seized more than three tonnes of raw tobacco.
The tobacco was in the process of being converted into counterfeit hand rolling tobacco.
HMRC estimates the Exchequer has lost about £5million in unpaid duty and VAT.
A 42-year-old man was arrested on suspicion of taking steps to evade excise duty