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Tuesday, 12 May 2009

Market crippled by heavy regulation

According to the BBC the world cocaine market is in retreat after a year of successful operations around the world. The Serious Organised Crime Agency says its undercover work has helped send wholesale prices from £39,000 per kilo in 2008 to over £45,000 (50,000 euros).

Street prices have remained stable, which is surprising in view of the weakness of the pound against the dollar, although discretionary incomes have fallen cutting demand.

This is obviously squeezing dealers margins, because figures obtained by the BBC suggest almost a third of police seizures are now less than 9% pure, the lowest recorded purity level.

Sounds like some prosections may be due under the Trade Descriptions Act 1968.

More on drug trade economics here.

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