‘Leadership’ vacuum in Sydney’s underworld leads to a sharp decline in street value of cocaine

The price of cocaine has dropped by more than $300,000 in just three years in Sydney and there’s a startling reason for it, according to multiple sources.

The price of cocaine has tanked to $130,000 per kilo thanks to an organised crime power vacuum that has allowed a flood of new players to enter the market.

The startling price drop – from a record peak of upwards of $450,000 just three years ago – has come as an unintended consequence of Sydney’s bloody gang war where many of the drug market’s alleged heavyweights were either assassinated or locked up by police.

Multiple sources familiar with the drug trade told The Sunday Telegraph it has created a “gold rush” style movement of new faces entering the cocaine business in an attempt to cash in on the lucrative Sydney market.

A 1kg block of cocaine like this isn’t worth as much as it used to be

The sources said the price drop has also been caused by huge stockpiles of cocaine hitting the market after being warehoused during the Covid border closures.

Further stockpiles that warehoused when crime syndicates got spooked by the AN0M sting in 2021 had also hit the market.

The result has been an over supply of cocaine being sold by the kilo, the sources said.

“Covid aside, it’s been around $180 (thousand for a kilo) for like 15 years,” one of the sources said. “Nine months ago it was $220 (thousand).

Drug kingpin Alen Moradian’s murder has changed the drug market landscape. Photo: Supplied

“Now, a lot of people are landing on $130 (thousand) – there’s just that much of it out there,” the source said. “Oversupply has sent it down.”

An Australian Federal Police spokesman confirmed the agency had “observed a drop off in the wholesale price of cocaine” but said powerful offshore drug cartels were still targeting Australia.

Even with the price drop, Australia is still a profitable market because the margins added to the drug are massive compared to other countries, the spokesman said.

“At their current level, wholesale cocaine prices in Australia can be about 500 per cent higher than reported prices in the United States, or 2500 per cent higher than reported prices in South America,” the spokesman said.

NSW Police declined to comment.

With many of the traditional cocaine heavyweights being arrested or killed, the sources said an increasing number of new players filling the power vacuum.

Drug kingpins like Alen Moradian and Mejid Hamzy have been murdered in underworld hits in the last five years.

Last month, Western Sydney power player Bilal Haouchar was jailed in Lebanon for drug offences, putting a question mark over his ability to do business in the future.

In September, NSW Police dismantled an alleged criminal group known as The Commission.

The sources said The Commission’s demise has opened the door for an increasing number of new players to fill the void.

Power player Mejid Hamzy was assassinated in 2020

Akrom Hamzy being arrested in September raids that police said put The Commission out of commission

The group, which has been linked to the Comanchero bikie gang, allegedly attempted to keep the price of cocaine high in NSW by controlling the supply and taxing others in the market.

“These sorts of criminal cooperatives are pretty short lived,” one of the sources said. “They are only as strong as their ability to maintain power.

“But when they’re getting locked up or killing each other in this ‘United we stand, divided we fall game’, they can’t control the others in the market,” the source said.

“(The other groups) want a slice of the pie and they don’t want to be told how to sell their slice of the pie,” the source said.

The shift has also seen more players attempt to cut deals directly with the powerful cocaine cartels overseas, rather than using Australian gangsters as middlemen, the sources said.

There is still an enormous amount of cocaine being smuggled into Australia every year with demand remaining high at the retail level where it is sold by the gram.

In December 2024, the AFP reported that it had seized 5.6 tonnes of cocaine in the past financial year.

Out of commission? Bilal Haouchar has been jailed in Lebanon

Bilal Haouchar, who is in a Lebanese jail.

According to one of the sources, huge stockpiles of cocaine were warehoused after alleged organised crime syndicates were spooked by the 2021 AN0M busts.

The worldwide sting resulted in the arrests of more than 800 alleged organised crime figures who were tricked into using a fake encrypted messaging app that was run by the AFP and FBI.

“People that got stuff (cocaine) sat on the gear, waiting for heat to die down,” the source said.

Other organised crime figures have been a victim of their own cost of living pressures and have had to sell low, the source said.

“A lot of people get gear in and sit on it expecting the price to go up — its like a stock market,” the source said.

Warehousing of cocaine like this has impacted the market price

Police discovered 722kg of cocaine with an estimated street value of over $1 billion. IN late 2023. Picture: NSW Police

“But there comes a point where you have to eat, drink, or pay the mortgage, or buy your wife a fresh Versace hand bag because she’s sick of wearing the other one.

“You get used to a high level lifestyle, so you have to generate money.”

The per kilo price drop is not expected to result in a reduction of the per gram price of cocaine.

“It’s not like a bank being a good corporate citizen passing on an interest rate drop,” another source said.

“Your local dial-a-dealer isn’t going to do any favours for their customers – they want to make as much money as possible.”

Do you have a story for The Daily Telegraph? Message 0481 056 618 or email [e-mail]

Originally published as ‘Leadership’ vacuum in Sydney’s underworld leads to a sharp decline in street value of cocaine