Source: The Guardian

21 November 2007.

By Alan Travis, home affairs editor

The true scale of Britain’s illicit drug economy was revealed yesterday 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 a trade with a turnover of between £7bn and £8bn a year.

The Home Office research says the average dealer has an annual turnover of £100,000 a year, many drug operations employ salaried staff as “runners and storers” and raise their heroin prices by as much as £1,000 a kilo as demand peaks at Christmas.

The research, based on prison interviews with 222 convicted drug dealers, also shows that a prison sentence is not seen as a significant deterrent, with their drug businesses handed over to employees or colleagues while they were inside. Most saw prison as an occupational hazard or “unlikely risk” and it is rare for operations to totally cease following an arrest.

Instead, asset recovery operations including confiscation orders were seen as a much bigger threat, with some dealers complaining to researchers that those arrested were “losing everything that they have – even the things they acquired through honest means”.

The study, the Illicit Drug Trade in the United Kingdom, undertaken by the Matrix Knowledge Group and London School of Economics, is the first large-scale interview programme with drug traffickers and dealers inside prison.

The estimate that 70,000 street dealers are active in the British drug economy is based on previously unpublished Home Office calculations. The report says the £7bn-£8bn estimate of annual turnover implies that the average street dealer does £100,000 worth of business each year.

Earlier Home Office estimates of the scale of the drug trade, between £4bn and £6.6bn in 2003-04, suggested the amount spent on drugs each year was equal to 33% of the tobacco market and 41% of that for alcohol.

The study published yesterday says demand for illegal drugs remains high and stable, with a tendency for dealers of heroin and cocaine to specialise.

It finds there are very high mark-ups along the supply chain from production to street level, about 15,800% in the case of cocaine and 16,800% for heroin. Even with those profit margins, dealers said their main challenge was cash flow.

The study says more than three-quarters of dealers began their activities through contact with friends and family, the only special skill needed being a “willingness to break the law”.

Trust is of crucial importance in dealers’ choice of who to work with.

They often choose only those they have grown up with or spent time in prison with.

The researchers found that only a fifth of dealers could be described as sole traders, with most operating in small- or medium-size enterprises and the overwhelming majority trying to “grow their operations”.

There is some use of salaried staff, typically in unskilled roles as runners and storers who are paid very small proportions of the cost of the transaction or the profit involved.

Only a small number of dealers suggested that the risk of arrest was increasing, with one cocaine dealer reporting that 20 of his original 50 contacts in the trade in 2003 are still operating.

One dealer believed he had married a woman who was a police informant:

she had him arrested with 100,000 ecstasy tablets and several hundred kilograms of cannabis.

He said he had found out that his wife had previously been married to two other drug dealers who were also caught.

The researchers also report the case of a cannabis and cocaine importer who gave his driver £300,000 on a Friday night to take abroad: “But the divvy decides it would be nice to lay the money on his bed, make mad passionate love to his 17-year-old girlfriend and photograph it.”

When the driver took his wife out on the Saturday night, his “girlfriend turned up pissed and showed the photos to his wife”. She in turn told Customs who arrested the driver at Dover, curtailing his business trip.

While most of those interviewed saw prison as an “occupational hazard”, only a third correctly estimated what sentence they would get.

Of confiscation orders, one national level heroin distributor said: “If you buy a home or a car or any possessions you will lose it when you get caught – and nearly everyone gets caught.”

Dealers’ tales

In these circumstances, a husband and wife falling behind with their mortgage would be used. The dealer said that “they would always be British to have a higher chance of getting through. They would bodypack two kilos and would be given £5,000-£10,000 between them, plus the cost of a holiday. The chance of getting caught in this scenario is higher.

You need to know somebody in the West Indies but this is not difficult to do. London is multicultural, you can meet a contact”

The key person in this deal was described as “the guy with the transport, be it a car, van, boat or large lorry. He charged £1,500 to £2,000 per kilo. Sometimes an agreement has been made prior that he will sell to you and you deliver the money. Depending on the supply in Spain you would pay £20,000 a kg but it could be £15,000.” The dealer reported that he had tried to sell he cocaine for £22,000 a kg to make his cheaper than his competitors, but there were times he sold it for £26,000-£29,000

Lone trader in ecstasy and heroin

Sol was on a fishing holiday in the Netherlands and met a man there who was involved in drugs and gave him his first ecstasy tablet. He liked it and they offered him 2,000 pills so he took them back to England in his fishing bag on the ferry. When he got back he found someone to buy them, through a friend of a friend who was a dealer. He started doing the trip like this every two to three months. Eighteen months later he started buying cocaine in the Netherlands too. He would bring the cocaine back on the ferry in the same way as he dealt with ecstasy.

Republish