The U.K drugs trade is worth £8 billion a year. Drugs are imported to the U.K from 300 major importers where it then goes to 3,000 gangs. Then 7,000 dealers sell it on the streets. The dealers on average earn £100,000 a year. This contributes to the total of £8 billion which the U.K spends on drugs each year, equivalent to more than 40 per cent of Britain’s alcohol sales and one third of its tobacco sales. Criminals are obviously involved in such a lucrative and illegal ‘industry’.
An 8th of cannabis costs £20 on average throughout Britain. A gram of cocaine costs about £40. An ecstasy pill usually costs between £3 and £5. A handful of magic mushrooms costs £5. A gram of heroin usually costs between £40 and £60. A wrap of speed usually costs £8 and £12.
In late 2005, the UK Home Office commissioned Matrix Research (MRC) and Consultancy and the London School of Economics to undertake a drug trafficker and dealer study. The aim of the research was to understand how high level drug dealers operate and how markets for illicit drugs work. MRC used unstructured interviews to gain their information from 222 prisoners who had been convicted of drug offences.
MRC found the following:
Market dynamics: This provides an overview of the market conditions within which the different enterprises have to operate.
Enterprise structures: This explores how and why individuals enter the market, how enterprises are structured, individuals’ roles, key business processes, and examines links with legitimate businesses.
Strategic responses by dealers: This explores the adaptations and strategies that individuals involved in the market undertake. It examines: how enterprises grow; the extent of competition, collusion and collaboration; risk management responses; and the impact of law enforcement.
The authors found that: demand for illicit drugs in the UK is high and stable; there has been a decline in prices over time does depend on price.
Cocaine and heroin dealers tended to specialise in the sale of these drugs. The mark-ups along the supply chain from production to street-level were 15,800% for cocaine and 16,800% for heroin. Despite these profits, cash flow was a problem for many drug dealing enterprises.
More than three quarters of dealers began dealing through contacts with friends and family, which implies that drug dealing spreads contagiously from existing dealers to new dealers. The level of entry into the drug market was largely determined by the level of the contact person that they entered through. Trust was a critical factor in dealers choosing who to work with, which meant that dealers tended to work with close friends, family or those that had been in prison.
Increases in drug dealers profits came primarily via increased sales, rather than via reducing their costs. This is because profit margins were very high and operating costs relatively low.
Courtesy of Lee Bryant, Director of Sixth Form, Anglo-European School, Ingatestone, Essex