Pubdate: Sun, 9 Dec 2007 Source: Sunday Business Post (Ireland) Copyright: 2007 The Sunday Business Post Contact: http://www.sbpost.ie/ Details: http://www.mapinc.org/media/577 Author: John Burke, Public Affairs Correspondent Bookmark: http://www.mapinc.org/pot.htm (Marijuana) Bookmark: http://www.mapinc.org/coke.htm (Cocaine) Bookmark: http://www.mapinc.org/mdma.htm (Ecstasy) Bookmark: http://www.mapinc.org/heroin.htm (Heroin) BOOM TIME FOR DEALERS Business is thriving for drug barons, with research suggesting huge profits from their operations here. Last week saw the tragic deaths of two Waterford men who ate cocaine at a party in the city a fortnight ago. Kevin Doyle (21) and John Grey (23) fell into comas following cocaine ingestion. Doyle died last Tuesday, while Grey lost his life yesterday morning. Model Katy French, who also died last Thursday after being in a coma for five days, revealed in a newspaper interview in the last fortnight that she had regularly taken cocaine. Preliminary autopsy results found traces of cocaine in her system, while the cause of death was brain damage. While further toxicology tests will tell the full story, the publicity surrounding the tragic events has sparked a huge debate about cocaine use in Ireland. While the public discourse over cocaine and other drug use here has led to the development of a lucrative industry in media comment and celebrity confessionals, little is known about the margins of profit that underpin Ireland's complex illegal drug industry. Like most products consumed here, drugs that eventually find their way to a Waterford house party or a socialite's handbag have invariably travelled from afar, and bear the cost of manufacture, transportation and payments to distributors. The introduction of the euro in 2002 made it easier to compare both wholesale and retail drug prices across Europe, with growing signs that Irish drug users pay over the odds compared to our nearest neighbours. Most recent price estimates from the Garda National Drug Unit (GNDU) put the price of cannabis resin - by far the most widely used illegal drug in Ireland - at €7 per gram for users here. A gram of herbal cannabis ,the product of choice for Ireland's growing network of Irish-based west African gangs, costs users half the price of resin. Comparatively, a gram of heroin here was priced at €200 in a 2003 study, making it by far the most expensive drug by weight. However, a key report by the European Monitoring Centre for Drugs and Drug Addiction last year found that pan-European heroin retail prices have fallen by 45 per cent in recent years. This decline in price is almost certainly due to oversupply from Afghan and Pakistani opiate producers. The same 2003 study indicated that cocaine users shelled out roughly €70 per gram in Dublin at that time - which would amount to 10 to 12 lines. The price remains more or less the same today. It is believed that the decision by Colombian drug cartels in recent years to turn their focus onto Europe and away from the saturated US market has kept the price at its 2003 level. A kilogramme of uncut cocaine has a wholesale price of about €40,000 in Spain - about double the US price. Broken down into street dealing amounts, it can retail for up to €200,000 here, though profits are dispersed down a food-chain of middle-level and smaller dealers before this amount of cash will have changed hands. The valuation of illegal drugs in the Irish market is closely aligned to comparable markets nearby, mostly in Northern Ireland, Scotland and Britain. There is close cooperation between Irish and British drugs gangs, as both groups use the same supply chains to traffic heroin from Afghanistan, cannabis resin from Morocco via Spain, herbal cannabis from South America, and ecstasy from Holland. But numerous analyses of prices paid by drug users here and in Britain show that Irish drug consumers are willing to pay over the odds for their illicit fix compared to their neighbours. With some exceptions, respective costs per weight of heroin, cocaine and ecstasy were higher here than in London, Glasgow, Cardiff and Belfast, according to the Health Research Board (HRB),which has led the way in studying the illicit drugs market here. The higher prices could have something to do with the higher purity of some drugs sold on the Irish market. The Forensic State Laboratory (FSL), in one analysis of heroin seized here, found that purity of the product was at the upper end of the scale compared to heroin seized in other European jurisdictions. Studies have shown purity levels as low as 10 per cent in Luxembourg and 43 per cent in Spain, whereas two separate analyses by the FSL of heroin here found purity levels of between 41.3 per cent and 45.8 per cent. FSL studies indicate that there is a close match between supply and demand in the Irish heroin market. Tests on heroin seized on the street for sale and heroin from a larger shipment seized by the Customs National Drug Unit found only a negligible difference in purity between what was being brought into the state and what was being sold on the street - indicating that the opiate is not significantly diluted by the time the user scores from his dealer. However, the cocaine market shows no such signs of balance. Different samples tested at the FSL laboratory vary in purity from as low as 1.8 per cent to highs of 75 per cent, with several studies showing purity levels in the mid-range. Such variation has potentially lethal effects for Irish cocaine users, with harmful constituent mixing ingredients including ephedrine, various powdered medicines that match cocaine in texture, rat poison, and even caffeine. Profits made from cannabis resin depend on largely unknown variations in the bulk of product sold, which complicate any attempt to figure out how much is made from trafficking the drug into Ireland from Spain and Holland. Most recent figures suggest the user pays roughly €3 0 for a quarter-ounce (seven grams) of resin. The GNDU estimates that the wholesale price of a kilo of cannabis resin is around €3,200. The potential profit from one kilo is massive: if sold at a rate per gram, the profit made from one kilo is over €11,700. However, when the kilo is sold off at the more likely quarter ounce weight, the profit is considerably less, at €980. The reality of how much money will change hands for one kilo of cannabis is somewhere between these two figures, with a small army of low-level dealers buying ounces and selling as much as possible in gram weight. The total value of the illegal drugs market here is almost certainly worth hundreds of millions, or possibly in excess of €1 billion. However, all attempts at calculating the value of the trade come with the caveat that no one can say they are certain their estimate is correct. Data drawn from several medical sources suggests there are over 14,000 heroin users in Ireland. The average spend of these users was calculated in one 2003 survey, which was then used to estimate of the total retail market for heroin. It indicated that the retail value of heroin in the Irish market was around €14 million. However, a separate survey suggested that the value of the Irish heroin trade that year was €54 million. This second survey was based on the estimate that drug seizures by police and customs represent just 10 per cent of the drugs available for sale. The same calculation technique indicated that the Irish cannabis resin market had a retail worth of over €370 million (by far the highest of all drug types), that the retail value of cocaine here was in excess of €75 million per year, and that ecstasy was worth over €129 million - although this latter valuation would appear to be inflated as there were a high number of seizures during the period covered by the survey. However, there is considerable disagreement among experts over the correct formula used to calculate the value of the Irish drugs market. In particular, it is claimed the calculation that seizures represent 10 per cent of illicit product in the market is flawed. One Revenue Commissioners source told The Sunday Business Post there is "absolutely nothing in terms of a reliable benchmark" to prove or disprove the widely accepted formula. If this means of measuring the quantity of drugs in the market is not accurate, then there is no way of knowing the amount of money being spent on cocaine, heroin, cannabis or other drugs here - nor is there any accurate way of knowing the total profits that major drug retailers in Ireland are making. The value of Britain's illicit drug economy - to which Ireland is closely tied - was last month revealed by official figures for the first time with the disclosure of an internal Home Office estimate that there are 300 major importers, 3,000 wholesalers and 70,000 street dealers involved in the trade, with a turnover of between stgUKP7 billion (€9.8 billion) and stgUKP8 billion (€11 billion) per year. The Home Office research - which was based on prison interviews with 222 convicted drug dealers - suggests the average dealer has an annual turnover of stgUKP100,000 (€140,000), and that many drug operations employ salaried staff as "runners and storers" and raise their heroin prices by as much as stgUKP1,000 (€1,400) a kilo as demand peaks at Christmas. Meanwhile, the United Nations Office on Drugs and Crime estimates that the retail value of the global drugs trade is four times the wholesale value. Irrespective of the difficulty in calculating levels of profit in the Irish drugs trade, the business has made some relatively anonymous figures in the criminal underworld tremendously wealthy. In an interview 12 months ago with this reporter, Garda chief superintendent Felix McKenna, the former head of the Criminal Assets Bureau (Cab), said the assets recovery unit had identified several major Irish drug importers who had diverted over €120 million into financial services in the Middle East, as a means of hiding their drug profits. Despite their best work and international cooperation with law enforcement units abroad, agencies such as Cab and the GNDU have no way of knowing whether this sum represents 1 per cent, 2 per cent or 10 per cent of the Irish drugs market profit margin. Doubtlessly, many multiples of this amount have been made by Irish drug gang bosses whose businesses, like themselves, are now primarily based in continental Europe, and whose profits soar irrespective of the rising gun crime, mental illness and death associated with their merchandise. - --- MAP posted-by: Richard Lake