Using prices from 2007-08 it gave as one example: “the wholesale price for a kilogram of cocaine in Colombia, a source country, is reported to be $US2348. By comparison, the same amount of cocaine had an Australian wholesale price of between $US150,000 to $US250,000. . . . wholesale prices in the United States, United Kingdom and Canada ranged between $US10,000 to approximately $US70,000 per kilogram.”
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Michael Phelan, Deputy Commissioner, Australian Federal Police, explained to the committee, “the reason the price is a lot lower in the United States is because supply is a lot easier in the United States than it is here. Those that are willing to pay for it at that particular price slide you up the demand curve and the price curve and you end up paying those terrible wholesale prices for it, which in turn see the profits and people willing to do it. It is a couple of years salary, the wholesale price for a kilo of cocaine.”
And it's not just cocaine. For heroin the wholesale price for a kilogram in Britain was typically $US29,569, in America $US71,200, and in Australia a whopping $US221,304.
For ecstasy the wholesale price for 1000 tablets was $US10,000 in the US, $US6468 in Britain, and up to $US25,344 in Australia.
Karen Harfield from the Australian Crime Commission informed the committee that the high Australian price for drugs was likely to affect the decision-making of international criminal networks. Which sounds like an understatement.
The committee's report is titled The Adequacy of Aviation and Maritime Security Measures to Combat Serious and Organised Crime. It concludes that security must be improved because there is “significant evidence of infiltration of the aviation and maritime sectors by organised criminal networks”, which “poses a very real threat to Australia”.
Some interesting information was provided in submissions to the inquiry, especially from the Australian Crime Commission. Two things at random:
The annual consumption of cocaine in Sydney and Melbourne is estimated as 3000 kilograms. (Multiply that by say $200,000 - see above - and you get a $600 million indsutry, at the wholesale level.)
More than 20 criminal networks are involved in the Australian fishing industry, which is vulnerable because fishermen have been under severe financial pressure as their industry declines. Despite the lack of detection, the ACC believes fishing boats and other small craft such as yachts play an important role in drug importation into this country. It expects to see increasing cases of large quantities of drugs dropped off at sea from ships – in some cases weighed down so they rest on the ocean floor - and collected by smaller craft.
Another submission, largely ignored by the committee, was from Lorraine Beyer, a highly experienced researcher of the heroin market. She claims the most important people working in heroin importation remain largely untouched by law enforcement, because they distance themselves from the handling and transportation of drugs. The “successes” by police and customs tend to involve arrests at the “bottom worker role level” of importation. Partly due to this, there is “no evidence showing that current counteraction is working well”.
So we might expect the recommendations of the parliamentary committee, if implemented, will lead to more arrests but not much less drug consumption.
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