Like any business, when production and transportation costs rise it's usually the consumer that feels the pinch. According to recent data released from the DEA, the price of cocaine out of Mexico has risen by 21% and the purity levels have declined. This is being interpreted as a victory for the forces trying to control the violent drug cartels in that beleaguered country. The costs of the ongoing turf wars and the stepped-up crackdown on distribution of the product have forced producers to pass on higher prices and cut corners in quality. As you might imagine, many people don't believe this will be a sustained trend and cite that price spikes in the past have done nothing to the long term viability of the business. Click on the title above to access the fascinating data released by the DEA.
Michael Shep:
ReplyDeleteI view this as a victory because what is the producer without the consumer? nothing. There is however the fact that prices WILL eventually start to fall. This can be compared with the housing market, people will finally say NO to cocaine and then the prices will drop until people start buying again. This is where I view this as an unsustained trend.
that 21% rise will defenately lower the cocaine consumption. This will lead to a point where it becomes completely impossible to buy it, therefore decreasing the market. since the DEA is now cornering them , they are unable to efficiently get the proper quality of cocaine hence the decrease in quality of the product which will result and an even lower consumption. All of this is a good sing of a shaky black market business. Yet if the DEA doesn't keep close observation on this issue, the product can find other routes or forms of distribution.
ReplyDeletewell people who are addicted to coke arent going to matter what the price is. they will buy no matter how much it is, even if the purity level has declined. i understand why the dea is getting involved and all their efforts im sure are greatly appreciated. but there will always be drug problems and issues where they dea likes it or not.
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