Chapter 8
Internal Distribution of Illicit Drugs
Short supplies and high prices were the main features of local illicit drug markets during 1976. The prices of drugs soared to an all-time high whilst their quality dropped to an all-time low. Under the pressure of effective law enforcement, drug distributors continued to take very strict security measures against detection.
Wholesalers
2 At the wholesale level, the practice of dispersing drug stocks to as many storage points as possible became even more popular in 1976. This practice was first adopted by traffickers in the latter half of 1975 and has proved to be quite effective in minimizing losses in the event of raids.
3 However, the law enforcement agencies were still able to disrupt the illicit trade seriously, by attacking the top level organizers of distribution syndicates. During the year, two major syndicates were smashed. One of them, headed by 42-year-old Chu Kwan-kong and his wife, was believed to have sold more than 500 kilogrammes of drugs, valued at about $78 millions between 1969 and 1974, both in Hong Kong and in Europe. Chu and his wife were both sentenced to 30 years imprisonment (same as the sentence imposed on Ng Sik-ho, the drug kingpin who was arrested in 1974). Eight other high-ranking members of Chu's syndicate were imprisoned for a total of 86 years. (See illustration on p. 61.) The other big syndicate was believed to have been operating actively in the western part of Kowloon.
4
The conspiracy charges provision in the Dangerous Drugs Ordinance has proved to be an effective weapon in the battle against syndicate heads. Those "Mr. Bigs", who took the utmost care to avoid handling illicit drugs personally, became more vulnerable when conspiracy charges were preferred against them. A case in point was the trial of Chu Kwan-kong, his wife and his eight assistants, who were all prosecuted on conspiracy charges.
Retailers
5 During the year the Police and the Preventive Service maintained pressure, at the street level, by continuously raiding the heroin selling points. As a result, small-time drug pushers had to operate on an erratic and mobile basis. This in turn caused difficulty for addicts in obtaining regular supplies, a factor which prompted many of them to seek treatment at the Government's methadone main- tenance and detoxification centres.
6 In yet another effort to increase security, a number of heroin pushers have developed a new system of sales, which is believed to be catering for as much as 25 per cent of the addicts in Hong Kong. Instead of making transactions on the streets, these pushers operate from their own residence with the help of a courier or a storekeeper. They obtain their supplies from low level distdibutors and sell only to old customers. The amount of heroin sold on each occasion is usually 30 to 60 grammes and, by pre-arrangement, the customer collects the heroin at a mutually agreed spot.
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New record highs of drug prices
7
The vastly increased overhead spent on security, coupled with a supply shortage, drove the prices of illicit drugs to new high records in 1976. In March, numbe heroin was being sold, at the street level, for $168,000 per kilogramme, compa
with $57,000 per kilogramme during the same period in 1975. At the end of 1976, the price eased to $132,000 per kilogramme. Similarly, the retail price of opium also rocketed. Prepared opium was being sold for about $1,600 per tael (a Chinese measurement equivalent to 37.7 grammes) in mid-1976, com- pared with about $440 per tael the year before.
8
Meanwhile, the quality of the drugs, heroin in particular, dropped drama- tically. In May, the purity of number 3 heroin on the illicit market dropped to 21.8 per cent, compared with the normal purity of 25-30 per cent. Although the dilution of heroin after it has left the refinery is not a normal practice, it appeared that the wholesalers have been doing so during the first half of the year in order to make the best use of their limited supplies. At times, the purity content was diluted to some 10 per cent. However, this unusual practice ceased to appear in the second half of the year. A graph showing the fluctuating retail price of heroin in relation to the varying degree of purity of the drug is at Appendix 4.
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