Introduction

• Author: Singleton, Nicola; Kalamara, Eleni; Noor, André
• Pages: 7-7

TECHNICALREPORTIEstimatingthesizeofthemainillicitretaildrugmarketsinEurope:anupdate

7

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1Introduction

Understandingthesizeandnatureoftheillicitdrugmarketsandhowtheyoperateisimportantforplanning

andprioritisingactivitiestotackletheproblemsassociatedwiththesemajorglobalmarketsand,overtime,

havingthepotentialtoidentifychangesinthemarketstructure.Thehiddennatureoftheillicitdrugbusiness,

however,makesitdifficulttoestimatetheamountofmoneyitgenerates,andpublishedestimatesare

variable,coveringdifferentpartsofthemarketanddifferentgeographicalareasandinvolvingmany

assumptionsandassociateduncertainties.Estimatesofthesizeoftheretailmarketsforarangeofillicitdrugs

areoneimportantelementoftheoverallpictureandtheonemostfrequentlyconsidered.IntheEuropean

Union,inlinewithinternationalstandards,thereisarequirementthatestimatesofthevalueoftheillicitdrug

market,alongwithotherillicitactivitiesthattaketheformof‘markettransactions’,areincorporatedin

nationalaccountsandithasbeenestimatedthatillicitdrugproductionandtraffickinginthe10Member

Statesforwhichdataareavailablerangedbetween0.02%(Luxembourg)and0.6%(ItalyandSweden)ofthe

nationalgrossdomesticproduct(GDP)intheperiod200415,andwas0.4%oraboveinhalfofthecountries

(Eurostat,2018)(1).Thesefiguresarebroadlycomparablewithavailableglobalfigures,showingretaildrug

salesintheUnitedStatesin2010beingequivalentto0.7%ofGDPandacross21EUcountriesin2015being

equivalentto0.32%oftheGDP(UNODC,2017).

Atthetimeoftheproductionofthe2016EUDrugMarketsReport,theEuropeanCommissionrequestedthat

theEMCDDAproduceinitialestimatesofthesizeofthemarketinillicitdrugsandinitialestimatesfor

cannabis,heroin,cocaine,amphetaminesandMDMAwereconstructedin2016,relatingto2013(EMCDDA,

2016).Thisexercisehighlightedthemanygapsinthebasicdatanecessarytoconstructtheseestimatesand

thelimitationsofsuchestimates.Nevertheless,althoughtheestimateswererecognisedaslikelytobe

considerableunderestimatesofthesizeofthemarketduetotheselimitations,theestimatesclearlyillustrated

thelargeamountsofmoneygeneratedforcriminalgroupsandgavesomeinsightintotherelativeimportance

ofdifferentdrugmarkets.Inadditiontothis,theprocessprovedvaluableinidentifyingkeygapsinour

knowledgeandareasforqualityimprovementworkandnewdatacollections.

ThisreportdescribestheoutputfromasecondroundofestimatesoftheEUretailmarketsizeconductedfor

the2019EUDrugMarketsReport.Theseestimatesmakeuseofadditionaldatasourcesandmethodological

improvementsthathavebeenobtainedfollowingtheexercisein2016andrelateto2017,beingbasedondata

fromthatyearorlatestdataavailable.Themethodologyused,therationalefortheapproach,andthe

assumptionsmadeintheprocessaredescribedinthisreport,whiledifferencestothefirstroundofestimates

providedarehighlighted.

Asectiononthebasicmodelandcommonconcernswillbefollowedbyadescriptionoftheestimationprocess

foreachofthesubstances:cannabis,cocaine,amphetamines,MDMAandheroin.Theresultsobtainedfor

eachsubstancearepresentedattheendofeachdrugsectioninTables2aand2bforcannabis,Table6for

cocaine,MDMAandamphetaminesandTable8forheroin.Finally,thelimitationsandvalidityoftheestimates

andkeyareasforimprovingthemovertimewillbediscussed.

(1)Czechia,Denmark,France,Germany,Italy,Luxembourg,Netherlands,Spain,Sweden,UnitedKingdom.AllEUcountriesproducedataon

thecontributionofillicitactivitiestoGDPaspartoftheirnationalaccounts,butoftentheyarenotdisaggregatedtoallowidentificationof

drugrelatedfiguresandsocouldnotbeincludedhere.Furthermore,itshouldbenotedthat,whereavailable,publishedstudiesvary

widelyintheperiodcovered—from2004(Denmark)to2013(Luxembourg).