* New players riding cocaine wave
* Criminals making ten-fold profit
* Competition drives 40pc price fall
AUSTRALIA'S organised crime landscape is being transformed by multinational cartels cashing in on huge profits in the nation’s burgeoning cocaine market.
In some cases, a kilogram of cocaine bought for $20,000 in the US can now be sold in Australia for $200,000, making it one of the most attractive drug markets in the world.
Lebanese and Italian groups have traditionally dominated the Australian cocaine trade because of their highly organised structure and strong connections with South American cartels.
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But in recent years, just about every major organised crime group, from bikies to Triads through to Serbian groups, have begun trading in the illicit drug - and are even working together.
Authorities are closely monitoring prices as an indicator of the amount of cocaine available, with police intelligence suggesting criminals are manipulating supply in order to maximise their cut.
But the influx of players vying for domination in Australia’s major cities, together with an unrelenting flow of the drug through smuggling routes, has seen the price of cocaine plummet.
Despite the strong profits, the price of the drug has been slashed by up to 42 per cent within a 12-month period, according to the latest figures from the Australian Crime Commission (ACC).
The street-price for a gram of cocaine fell from $350 in New South Wales and $250 in South Australia to $200 in both states in the 2006/07 financial year.
ACC chief executive officer Alistair Milroy confirmed the increased number of groups entering the trade could be a factor in the price cuts.
"Organised criminal groups employ a range of strategies to deliberately manipulate their control over illicit drug markets or to enter new drug markets," Mr Milroy said.
"This may include aggressive marketing through undercut or reduced prices, or agreements between major players to set prices."
He also said economic conditions and "perceived market placing" were also factors.
The NSW Crime Commission has found that the wholesale price plummeted by half during the following year.
It is believed that the price of the drug in Sydney - traditionally the nation's biggest cocaine market - has been slowly rising in recent months but it is not yet apparent if it is due to a slowdown in supply.
"At the end of the year, the kilogram price of cocaine was about half of its peak," the NSW Crime Commission said in its 2007-08 annual report.
"The wholesale price remains a good indicator of the quantities available in the market."
Despite huge seizures in recent years, authorities appear to have struggled to stem the flow of the drug, as indicated in the falling price.
A total of 124kg of cocaine was seized by Australian authorities in the 2005/06 financial year.
In the following year, a whopping 610kg was seized by customs and an equally-impressive 634kg was uncovered by state and federal police.
Customs alone seized 649kg of the drug in 2008.
The Australian Federal Police declined to answer questions on the availability of the drug and said it would just be speculation if it did so.
Customs refused to answer any questions about how much of an impact recent seizures have had on the flow of cocaine into Australia.
A Customs spokeswoman said: "we can’t really speculate on that."
While many studies have suggested that the drug is traditionally consumed by those with a high social standing or the more hardcore drug experimenters, recent research from the Australian Institute of Health and Welfare (AIHW) found that use was increasing at a high rate.
The number of Australians who had ever used cocaine grew from 775,000 in 2004 to exceed one million in 2007, according to the AIHW’s National Drug Strategy Household Surveys.
"Most users usually obtained cocaine from a friend or acquaintance and usually used the drug in their own home or at a friend’s house," the AIHW said in the report of the most recent survey.
"Among recent users, one in ten reported that all of or most of their friends use cocaine."
By Mark Schliebs
January 30, 2009 12:30am
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Organised crime gangs cashing in on huge cocaine profits [AU]