30 March 2021
'High rollers' A study of criminal profits along Australia’s heroin and methamphetamine supply chains
This report helps develop an understanding of the quantum of profits being made and where in the value chain they occur. Australians spent approximately A$5.8 billion on methamphetamine and A$470 million on heroin in FY 2019.
Approximately A$1,216,806,017 was paid to international wholesalers overseas for the amphetamine and heroin that was smuggled into Australia in that year. The profit that remained in Australia’s economy was about A$5,012,150,000. Those funds are undermining Australia’s public health and distorting our economy daily, and ultimately funding drug cartels and traffickers in Southeast Asia.
One key takeaway from the figures presented in this report is that the Australian drug trade is large and growing. Despite the best efforts of law enforcement agencies, methamphetamine and heroin use has been increasing by up to 17% year on year. Falling prices in Southeast Asia are likely to keep pushing that number up, while drug prices and purity in Australia remain relatively stable.
Authors Dr John Coyne and Dr Teagan Westendorf write that, 'While ever-larger drug busts continue to dominate the headlines, the underlying fact is that methamphetamine and heroin imports continue to rise despite authorities seizing up to 34% of imported drugs'.
As production prices for methamphetamine continue to decline along with wholesale prices, more sophisticated transnational organised crime actors are likely to begin to examine their business models in greater detail. Industrial production of methamphetamine for high-volume, low-profit regional markets like Australia has significant benefits for them.
The data suggests that the more sophisticated transnational organised crime groups will seek to expand their control of the heroin and methamphetamine value chains to include greater elements of the wholesale supply chain as well as alternative product lines, such as synthetic opioids.
The authors note that 'in the absence of supply reduction, and even with more effective supply-chain disruption, our federal and state governments will need to invest more heavily in demand reduction and harm minimisation.'