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. 
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MAP posted-by: Richard Lake