From high seas to High Street

In Britain, Europe’s biggest consumer of narcotics, the Home Office reckons that drugs are brought in by about 300 major importers, who pass them to 30,000 wholesalers and then to 70,000 street dealers. Cocaine, meaning both the sniffable powder and smokable “rocks” of crack cocaine (which can be made using a simple microwave), accounts for about half the value of this industry, being less widely taken than cannabis but much pricier.
Some rare light was shed on the business by a Home Office study in 2007, in which 222 drug-dealers were interviewed in prison by analysts from Matrix Knowledge Group, a consultancy, and the London School of Economics. One dealing partnership, based in London and Spain, bought cocaine from a Colombian importer in 10kg bundles, which they sold to retailers using an employee whom they paid £500 ($703) per transaction. A second employee, paid £250 a day, would collect money from the buyers and pass it to a third member of staff, who would count it (processing up to £220,000 each day). Other employees would pay the Colombians and smuggle the rest of the cash, on their bodies, back to Spain.
Most drug businesses are forced to stay small and simple to evade the police. Only one dealer claimed to be part of an organisation of more than 100 people, and a fifth were classified by researchers as sole traders. Fear of being uncovered also hampers recruitment: most dealers stuck to family and friends, and people from the same ethnic group, when hiring associates. Just like other businessmen, they carried out criminal-record background checks on potential employees—except that, in this case, a record was a good thing.
Kevin Marsh, an economist at Matrix Knowledge, argues that most players in the drug business have a poor knowledge of the market. “Shopping around for new wholesale suppliers is risky, so many retailers stick to the same one and pay over the odds,” he says. Most of the dealers interviewed knew little about the purity of what they were buying, and money laundering was usually fairly shambolic. Managing cashflow is one of dealers’ biggest weaknesses, according to one drug specialist at the Serious Organised Crime Agency (SOCA): “Supply of powder is the most resilient thing. To destroy the business, you have to go after the money.” That, and extradite foreign dealers, as America has long done. Britain is believed to be negotiating its first-ever extradition of a Colombian, on drug charges, at the moment.
Times may at last be getting harder for cocaine-dealers. Shortly before Christmas, the wholesale price in Britain shot up to £40,000 per kilo, the highest in years. Better policing was one cause; another was the slump of sterling. European retailers’ margins have been chipped away. To protect their profits, dealers are diluting what they sell. A decade ago, average street-level purity was about 60%; police say it is now nearer 30%. “People think there is a lot of cocaine around, but two thirds of it isn’t cocaine at all,” says one SOCA officer.
That would be fine if the remainder were talcum powder. But in the past few years dealers have turned to pharmaceutical cutting agents such as benzocaine, a topical anaesthetic, which mimic the effects of cocaine and may be more harmful. Dealers call such agents “magic” because of their effect on profits. “Grey traders”, who knowingly sell such chemicals to dealers, are starting to be convicted.
Educating drug-takers about what is getting up their noses may lower demand. But cutting raises bigger questions for drug policy. “We may have to say at some stage that taking heavily adulterated cocaine is more physically harmful to the user than taking cocaine that’s less adulterated,” a senior SOCA official says. “That is not the case at the moment. But we’ve got to keep asking the question. I’m aware that the health equation could one day say: Stop trying to stop cocaine coming in.”
Source: 5 March 2009

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