Taxing the UK Drugs Market
Matthew J Atha BSc MSc LLB
Independent Drug Monitoring Unit
IDMU has conducted surveys of drug consumption in the UK over the past 10 years, involving a total of nearly 15000 UK drug users recruited at pop festivals and other outdoor events using anonymous self-completed questionnaires, collecting data on frequency of use of a range of different drugs, monthly spending on these drugs, among other data including whether the respondent had been "busted" for cannabis or other drugs.
Estimating Prevalence
Cannabis
An estimate of the number of regular cannabis users in the UK can be arrived with reference to the proportion of the sample who have been arrested for cannabis offences, their average duration of cannabis use (average age minus age first used cannabis) and the total number of cannabis convictions in the UK over the periods in question (historic data from Home Office statistical bulletins). Between 1945 and 2002, there were around 1.23 million cannabis convictions in the UK, the vast majority in the past 10 years.
|
Year |
% Busted Cannabis offences |
Avg Duration (yrs) |
Busts /use year |
Convictions over avg duration |
% Regular Users in survey |
Estimated Number of Regular Users |
|
1994 |
21.2% |
9.18 |
2.31% |
270250 |
75.5% |
961,073 |
|
1995 |
25.3% |
8.69 |
2.91% |
295695 |
85.9% |
1,005,198 |
|
1997 |
21.0% |
9.45 |
2.23% |
362966 |
70.1% |
1,209,383 |
|
1998 |
23.2% |
12.78 |
1.82% |
605532 |
67.3% |
1,753,261 |
|
1999 |
21.4% |
11.48 |
1.86% |
655547 |
71.0% |
2,175,048 |
|
2000 |
19.6% |
11.42 |
1.71% |
718519 |
68.5% |
2,516,565 |
|
2001 |
18.2% |
11.54 |
1.58% |
768654 |
73.6% |
3,106,950 |
|
2002 |
15.1% |
12.80 |
1.18% |
850228 |
58.2% |
3,273,777 |
|
2003 |
17.0% |
11.39 |
1.50% |
839902 |
68.0% |
3,350,801 |
|
1994-2003 |
18.2% |
10.89 |
1.67% |
818891 |
67.9% |
2,150,228 |

Prevalence of other drugs
Taking the survey data as a whole, these would represent approximately 3.1 million drug users in the UK (not all of whom use cannabis). By applying the proportions of survey respondents who reported lifetime and/or regular use of other drugs, an estimate of prevalence can be calculated.
|
Drug |
Total Ever |
% |
Regular |
% |
Lifetime |
Regular |
Occ/Exp |
|
Amphetamine |
6174 |
42.4% |
957 |
6.6% |
1333385 |
206681 |
1126704 |
|
Cocaine |
5154 |
35.4% |
852 |
5.9% |
1113098 |
184005 |
929093 |
|
Crack |
1026 |
7.1% |
107 |
0.7% |
221583 |
23109 |
198474 |
|
Heroin |
1257 |
8.6% |
133 |
0.9% |
271471 |
28724 |
242748 |
|
Ecstasy |
5592 |
38.4% |
1832 |
12.6% |
1207692 |
395653 |
812039 |
|
LSD |
5883 |
40.4% |
685 |
4.7% |
1270538 |
147938 |
1122600 |
|
Base |
14552 |
Total Users @ 2003 |
3142763 |
||||
It is accepted that estimates of heroin and crack cocaine are likely to be low, due to the methods of data collection at pop festivals and other outdoor venues frequented by recreational drug users, where problem drug users tend to be unwelcome, and unable to afford the entry prices. For historical reasons, our figures are likely to overestimate the current value of the LSD and Amphetamine which have declined in popularity in favour of ecstasy and cocaine.
Bramley-Harker [2001][1] of NERA estimated drug prevalence and spending for the Home Office, and arrived at the following figures for prevalence of regular users for the following drugs, from prevalence of drug positive urine specimens from arrestees[2]. The methodology was effective at detecting users of stimulants and opiates, who tend to be more likely to come to police attention than users of cannabis and hallucinogens.
|
Drug |
Regular Users |
|
Cannabis |
595797 |
|
Amphetamines |
116725 |
|
Cocaine |
237180 |
|
Crack |
102606 |
|
Heroin |
156166 |
|
Ecstasy |
76354 |
The British Crime Survey is a household survey which asks interviewees whether they have ever used a range of drugs and if so whether they have used these in the past year or past month. Bennett found that approximately 25% of users with positive tests failed to report use of that drug when interviewed, suggesting their estimates of prevalence should be increased by approximately 33%. The BCS figures for 2000, the most recent year with full details published, were as follows
|
Drug |
Lifetime |
Past Year |
Past Month |
|
Cannabis |
4839231 |
2330000 |
1510000 |
|
Amphetamine |
2258308 |
562414 |
188750 |
|
Cocaine |
1075385 |
572000 |
253000 |
|
Crack |
215077 |
107000 |
53000 |
|
Heroin |
215077 |
95000 |
60000 |
|
Ecstasy |
1182923 |
401724 |
215714 |
|
LSD |
1182923 |
160690 |
52069 |
Maximum and Minimum Figures for regular users. Regular users typically account for in excess of 80% of the value of the market for most commodities, and drugs are no exception.
|
Drug |
IDMU |
NERA Regular |
BCS Month |
Min Estimate |
Max Estimate |
|
Cannabis |
3,350,801 |
595797 |
1510000 |
595797 |
3,350,801 |
|
Amphetamine |
206681 |
116725 |
188750 |
116725 |
206681 |
|
Cocaine |
184005 |
237180 |
253000 |
184005 |
253000 |
|
Crack |
23109 |
102606 |
53000 |
23109 |
102606 |
|
Heroin |
28724 |
156166 |
60000 |
28724 |
156166 |
|
Ecstasy |
395653 |
76354 |
215714 |
76354 |
395653 |
|
LSD |
147938 |
- |
52069 |
52069 |
147938 |
Monthly Spending on Drugs
Respondents to IDMU surveys are asked to state how much they spend on a range of drugs during an "average month", and how often they use a particular drug. Regular use is categorised as use monthly or more often.
|
Drug |
Regular |
Occasional |
|
Cannabis |
£ 86.67 |
£ 36.45 |
|
Amphetamines |
£ 102.24 |
£ 26.31 |
|
Cocaine |
£ 168.74 |
£ 33.90 |
|
Crack |
£ 444.59 |
£ 27.59 |
|
Heroin |
£ 447.40 |
£ 24.65 |
|
Ecstasy |
£ 39.62 |
£ 19.23 |
|
LSD |
£ 18.89 |
£ 6.99 |
Value of the UK Drugs Market
Spending by regular users
Regular users of any particular drug account for the bulk of spending on that drug. Applying the IDMU spending data to the minimum and maximum prevalence estimates for regular users, annual spending by regular users can be calculated at between £1.46 billion and £5.86 billion per year.
|
Minimum Estimate |
Maximum Estimate |
Monthly Spending |
Minimum Value |
Maximum Value |
|
|
Cannabis |
595797 |
3,350,801 |
£ 86.67 |
£ 619,652,712 |
£ 3,484,967,072 |
|
Amphetamine |
116725 |
206681 |
£ 102.24 |
£ 143,207,568 |
£ 253,572,785 |
|
Cocaine |
184005 |
253000 |
£ 168.74 |
£ 372,588,044 |
£ 512,294,640 |
|
Crack |
23109 |
102606 |
£ 444.59 |
£ 123,288,364 |
£ 547,411,218 |
|
Heroin |
28724 |
156166 |
£ 447.40 |
£ 154,213,411 |
£ 838,424,021 |
|
Ecstasy |
76354 |
395653 |
£ 39.62 |
£ 36,301,746 |
£ 188,109,262 |
|
LSD |
52069 |
147938 |
£ 18.89 |
£ 11,803,001 |
£ 33,534,586 |
|
Total Spending by Regular Users |
£ 1,461,054,846 |
£ 5,858,313,585 |
|||
Spending by Occasional Users
Total spending by occasional drug users would be worth roughly £687 million per year.
|
Spending on Drugs by Occasional Users |
|||||
|
Occasional Users |
Monthly Spending |
% of min |
% of max |
Total Occasional Users Value |
|
|
Cannabis |
820,000 |
£ 36.45 |
37% |
9% |
£ 358,668,000 |
|
Amphetamine |
373664 |
£ 26.31 |
45% |
32% |
£ 117,973,133 |
|
Cocaine |
319000 |
£ 33.90 |
26% |
20% |
£ 129,769,200 |
|
Crack |
54000 |
£ 27.59 |
13% |
3% |
£ 17,878,320 |
|
Heroin |
35000 |
£ 24.65 |
6% |
1% |
£ 10,353,000 |
|
Ecstasy |
186010 |
£ 19.23 |
54% |
19% |
£ 42,923,633 |
|
LSD |
108621 |
£ 6.99 |
44% |
21% |
£ 9,111,103 |
|
Total Spending by Occasional Users |
32% |
10% |
£ 686,676,390 |
||
Overall size of UK Drugs market:
The total size of the UK drugs market would thus be estimated at between £2.15 Billion and £6.54 Billion per annum.
|
Total Value of UK Drugs Market |
||||
|
Drug |
Minimum Value |
Maximum Value |
Share of min |
Share of max |
|
Cannabis |
£ 978,320,712 |
£ 3,843,635,072 |
46% |
59% |
|
Amphetamine |
£ 261,180,701 |
£ 371,545,918 |
12% |
6% |
|
Cocaine |
£ 502,357,244 |
£ 642,063,840 |
23% |
10% |
|
Crack |
£ 141,166,684 |
£ 565,289,538 |
7% |
9% |
|
Heroin |
£ 164,566,411 |
£ 848,777,021 |
8% |
13% |
|
Ecstasy |
£ 79,225,379 |
£ 231,032,896 |
4% |
4% |
|
LSD |
£ 20,914,104 |
£ 42,645,689 |
1% |
1% |
|
Total |
£ 2,147,731,236 |
£ 6,544,989,974 |
100% |
100% |
Potential for Excise Duties
2003 UK Drug Prices & Profit Margins:
Current prices of drugs, from 2003 survey. Production costs are based on the following:
Cocaine/Crack - $2000 per kilo (Columbia) at 70%, ounce/gram @ 40%
Cannabis Resin - £150 per kilo (Morocco), UK Kilo and 1/8oz prices
Cannabis Skunk Ø estimated £170 per kilo in electricity, nutrients and equipment, UK Kilo and 1/8oz prices
Amphetamine/Heroin Ø Pharmaceutical prices at 100%, retail at typical street purity, wholesale amphet at "base" prices @ 40%, street @ 14%, heroin at 50% purity
LSD/Ecstasy Ø guesstimates for production, UK 100 tab and 1 tab prices
|
2003 UK Drug Prices per gram equivalent |
|||
|
Drug |
Production Cost |
Distributor Price |
Max Retail Price |
|
Cannabis Resin |
£ 0.15 |
£ 0.90 |
£ 2.85 |
|
Cannabis Skunk |
£ 1.70 |
£ 2.85 |
£ 5.75 |
|
Amphetamine* |
£ 6.86 |
£ 12.67 |
£ 60.64 |
|
Cocaine* |
£ 1.20 |
£ 35.10 |
£ 117.65 |
|
Crack* |
£ 1.50 |
£ 40.17 |
£ 139.63 |
|
Heroin* |
£ 12.30 |
£ 57.14 |
£ 207.20 |
|
LSDº |
£ 0.20 |
£ 1.51 |
£ 3.91 |
|
Ecstasyº |
£ 0.20 |
£ 1.58 |
£ 4.02 |
|
* Per pure gram - º Per tab/dose |
|||
UK Drug Price Trends
Prices of cannabis resin, ecstasy and heroin have fallen sharply in recent years (all by 50% or more), although skunk, amphetamine and cocaine prices have remained stable, and LSD prices have increased over the past 10 years.
|
UK Drug Price Trends 1995-2003 |
||||||||
|
Drug |
1995 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
|
Resin 8th |
£ 14.39 |
£ 14.06 |
£ 13.64 |
£ 12.88 |
£ 12.01 |
£ 11.29 |
£ 10.74 |
£ 9.96 |
|
Skunk 8th |
£ 20.21 |
£ 20.63 |
£ 20.82 |
£ 20.98 |
£ 20.70 |
£ 19.94 |
£ 19.95 |
£ 20.14 |
|
Amphet gram |
£ 8.28 |
£ 8.07 |
£ 8.04 |
£ 8.74 |
£ 8.43 |
£ 8.71 |
£ 8.85 |
£ 8.49 |
|
Cocaine gram |
£ 56.66 |
£ 50.51 |
£ 51.92 |
£ 50.55 |
£ 49.38 |
£ 46.20 |
£ 47.95 |
£ 47.06 |
|
Crack rock |
£ 21.50 |
£ 21.64 |
£ 19.38 |
£ 23.65 |
£ 20.48 |
£ 18.91 |
£ 22.23 |
£ 22.34 |
|
Heroin gram |
£ 83.33 |
£ 69.69 |
£ 71.25 |
£ 56.40 |
£ 60.00 |
£ 54.00 |
£ 48.54 |
£ 35.83 |
|
LSD Tab |
£ 2.99 |
£ 3.25 |
£ 3.28 |
£ 3.26 |
£ 3.53 |
£ 3.73 |
£ 3.68 |
£ 3.91 |
|
Ecstasy tab |
£ 11.65 |
£ 9.84 |
£ 9.46 |
£ 8.38 |
£ 6.99 |
£ 6.24 |
£ 5.47 |
£ 4.02 |

Market Shares of Illicit Drugs
Cannabis accounts for the vast majority of spending on drugs in the UK, and clear trends are apparent, notably an increase in the use of cocaine and crack at the expense of amphetamine, and an increase in heroin usage. Use of LSD is in long-term decline, and ecstasy use may have peaked, with a fall in market share over the past two years,
