Mexican drug cartels moving in, taking control of meth trade

Mexican drug cartels have taken control of half the supply of methamphetamine to Australia and New Zealand, a US official says.

Drug users in Australia pay among the highest prices in the world. Picture: WA Police Force

Mexican drug cartels have taken control of half the supply of methamphetamine to Australia and New Zealand after a concerted push to target the lucrative markets, a US official says.

Asian syndicates mass-producing meth in and around lawless ­regions of Myanmar had been ­behind as much as 80 per cent of the drug sold in Australia and New Zealand two years ago, the US Drug Enforcement Administration’s Australia attache, Kevin Merkel, said. Mexican gangs — in particular the Cartel Jalisco Nueva Generacion (Jalisco New Generation Cartel) or CJNG — had since dramatically increased their share of the markets as the COVID-19 pandemic disrupted supply chains globally.

“Numbers are equalling out to maybe 50-50, with Mexican meth now being mixed in and supplementing or supplanting some of the Asian meth that’s being disrupted coming into Australia and New Zealand,” Mr Merkel said.

Australia and New Zealand are attractive markets because drug users pay among the highest prices in the world.

Mr Merkel said CJNG had “stepped up and amplified their ­efforts to expand globally”, overtaking the Sinaloa Cartel as probably the No 1 meth supplier to the US. The Sinaloa Cartel was ­headed by Joaquin “El Chapo” Guzman Loera, now serving a life sentence in the US. In 2018, the US government ­offered a $US10m ­reward for the arrest of CJNG leader Nemesio Osequera-Cervantes, aka El Mencho.

“CJNG has definitely made the effort and accomplished a more solid footprint and a foothold here in Australia and in New Zealand,” Mr Merkel said.

“They’ve globalised their business model to a degree that Sinaloa did prior to them.

“They’ve found networks here (in Australia) … that they trust dumping tonnage of methamphetamine into the country.”

Precursor chemicals for Mexican meth were predominantly from China, he said.

The DEA has 93 offices overseas, gathering information and building cases against groups that impact the US. In Australia, there are DEA agents in Canberra and Sydney and the agency works with the Australian Criminal ­Intelligence Commission and federal and state police.

Mr Merkel said the focus was on taking down the highest level drug traffickers listed by the ACIC. “Australia’s a huge consumption country with high price points for cocaine, methamphetamine (and) MDMA,” he said.

“With our presence in other places overseas, we get exposure to those significant organised crime groups that obviously are dumping their drugs into Australia to maximise the profits. The ones that are targeting Australia are also impacting other countries and especially the US in some way, shape or form.”

Mr Merkel said that because some traffickers such as outlaw ­bikies, the Italian mafia and Balkan organised crime gangs had operated in Australia for decades and had connections around the world going back generations, there were “ebbs and flows” in the source of illicit drugs over time.

The pandemic “screwed up logistics” and made it difficult for syndicate members to meet in person, potentially contributing to a shift to Mexican cartels, he said.

“Nothing was able to move, and that could have caused a shift just in and of itself,” he said.

A NSW Crime Commission ­report in January stated that crime groups were waiting many months for importations due to disruptions to the supply chain in China and Southeast Asia.

And an ACIC report last week revealed that based on wastewater analysis, meth consumption in Australia had dropped to its lowest level in four years in August, before rebounding in capital cities in October.

Mr Merkel said major international drug seizures, including significant maritime hauls of meth from South America bound for the US, indicated trafficking was “back in full force”.

The DEA is understood to be among law enforcement agencies working on the Australian Federal Police-led Operation Kungur, targeting a meth-focused syndicate known as both The Company and Sam Gor involving five separate Asian triads. Two senior alleged leaders of the syndicate, Tse Chi Lop and Lee Chung Chak, have been arrested overseas at the AFP’s request and are facing ­extradition to Australia.

Mr Merkel said Kungur had “led to multiple other operations that were hugely successful and impactful for Australia”.