Why Cocaine Prices Vary Wildly in Different Nations

By Dirk Hanson 06/27/11

New UN report claims that Brits get their coke on the cheap, while Aussies pay up the nose.

The variable cost of coke.
Photo via thinkstockphotos

One of the nice things about going back for a second look at these bulky, chart-laden UN reports is that we get a chance to tease out some specifics amid the global generalities. If any news organization is up to the task of diving into the charts, maps and infographics of the latest 2011 World Drug Report by the UN, it is the stolid Economist. Among the interesting dumplings The Economist pulled out of the stew was this: “Despite all the effort put into the war on drugs, the street price of cocaine in Europe has dropped relentlessly over the past two decades (even adjusting for inflation and impurity).”

As we reported  last week, the UN report highlighted the rise in amphetamine-type drugs, and noted that “cocaine treatment demand has been declining in the Americas, especially in North America, while it has increased in Europe.” Drug Czar Kerlikowske said recently that the “cocaine market remains under significant stress.”

Depends on which market you’re talking about. For example, we think it’s fair to say they’ve got cocaine on the run up in Norway, where The Economist says a gram of street product in Oslo will cost you US $150 or more. By contrast, a gram scored off the streets of London right now will run the buyer no more than about US $60. That’s a significant spread. And it signals plenty of product availability at the low end. Some of the cheapest cocaine in the developed world is found in Britain, the Netherlands, Belgium, and Portugal.  And that makes sense, if you think back to Economics 101. Supply and demand. In Britain, total usage of cocaine as a percentage of the population stands at 2.6. For Norway, the comparable percentage is 0.8.  Other high-priced countries include Finland, Sweden—and Greece, where demand for cocaine is almost nonexistent (0.1%)

Of course, economics is never that simple: One longstanding theory is that prices go up, regardless of demand, the farther away a country is from a source of illegal supply. That’s why prices are high in Australia, but extremely low in Panama, for instance. But that rule may be giving way in an era of translational drug thuggery on an unprecedented scale.  As for cost, we’re going with the magazine’s claim of “street price,” although some of the numbers seem pretty high.

What about the United States? Here, The Economist may have stubbed its toe. With 2.4% of the U.S. population pegged as users, you would expect American blow to be on the cheap end of the scale. But The Economist pegs an American gram at US $120—but all of our best-informred sources insist that figure is too high. Anecdotally, prices appear to be running in the US $70-$100 range in selected markets, which is roughly what you would expect to see, compared to other countries on the chart. Even the magazine’s figure of US $120 would still be well below historical highs for top-grade product. And that’s depressing, because with no significant change in the amount of cocaine produced globally, we’re forced to conclude that funding for the billion-dollar drug war isn’t coming out of the pockets of cocaine users.

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Dirk Hanson, MA, is a freelance science writer and the author of The Chemical Carousel: What Science Tells Us About Beating Addiction. He is also the author of The New Alchemists: Silicon Valley and the Microelectronics Revolution. He has worked as a business and science reporter for numerous magazines and trade publications including Wired, Scientific American, The Dana Foundation and more. He currently edits the Addiction Inbox blog. Email: [email protected]