Cocaine Is the Hidden Mixer in Newcastle's Economy

Times may be tough in the North-East, where austerity has bitten harder than in most parts of Britain, but Newcastle's increasingly embedded cocaine trade is providing a route out for some.

Dressed in Lacoste, Ralph Lauren, Moncler and Barbour, a new breed of Geordie entrepreneur can be found living the high life on three-day benders, fuelled by bundles of cash and increasingly pure cocaine. They will book a £500 private table in one of the city's luxury bars, complete with a handy privacy curtain so they don't have to bother trekking to the toilets to hoover lines off their iPhones.

But the cocaine is not just for snorting. Emerging research into key players in Newcastle's blossoming cocaine trade carried out by researchers at Northumbria University reveals that the drug is a commodity that is becoming increasingly attached to the city's legitimate economy.

Imported and distributed almost exclusively by the region's white crime groups, cocaine is the new drug of choice in Newcastle's thriving night-time scene. Criminal groups have taken advantage of a shift that is seeing old school nightclubs die out, making way instead for a string of luxury late bars across the city, where evenings revolve more around champagne, sparklers and money-waving than fist-pumping, shuffling and 2-4-1 mixers.

Until recently, the city's cocaine trade had been operating largely under the radar. Unlike the heroin market, for instance, cocaine is protected at transaction stage by a veil of legality: in its powder form, it is a drug bought and sold by respectable-looking people in respectable-looking places, away from police eyes.

Violence directly connected to the cocaine trade is rare in Newcastle. Despite having the highest rate of drug deaths in the country, the drug trade itself is far less volatile in the North East than in Liverpool, Birmingham and London. Newcastle is a compact city, and the white working-class families who run the area's drug trade – alongside growing involvement from established British Asian and Chinese groups – all know each other.

However, it was a vicious punch-up at a bar between two crime gangs – and mounting evidence that door staff and promoters working at venues were involved in selling cocaine – that led to the launch in July, 2017 of Operation Doncaster, an undercover police investigation into cocaine dealing in Newcastle city centre.

As a result, in December, police temporarily shut down three adjoining late-night bars – House of Smith, Florita's and Madame Koo – on a section of Collingwood Street marketed by bar owners as the "Diamond Strip". In a report to Newcastle City Council, Chief Inspector David Pickett alleged that dealers at the three venues were given a "celebrity-like status", allowing them to move freely in and out of the bars without being searched by doormen.

"Discussions and the supply of controlled drugs in the venue were overt, with no attempt to conceal the illegal activity," said the police report. "It was through initial interactions with promoters and staff at the venue that officers were supplied with class A drugs. Promoters engaged freely with the UCOs [undercover officers], providing numbers for their dealers."

One promoter handed an undercover officer the number of a dealer for the supply of half a kilo of cocaine. One dealer told an undercover officer he had the door staff "in his pocket". Another referred to the House of Smith as the "House of Coke". Promoters and doormen at the bars were not directly employed by the venues, and police found no evidence showing management was aware of what was going on.

Operation Doncaster also found evidence that people working at three other city centre bars – the Science Bar, Yolo and the Empress – had links with cocaine selling. Again, no evidence was found to show management was aware of this.

The bars, whose licenses were put under review as a result of the police investigation, have promised to tighten up their anti-drug policies, some have sacked staff, and all are now back open for business. To date, the police's undercover operation has resulted in the seizure of £17,000 in cash, £14,000 worth of cocaine and the arrest of 21 people on suspicion of conspiracy to supply class A drugs.

But Newcastle's cocaine trade runs deeper than its infiltration of the night-time economy. Observing Newcastle's culture of cocaine dealing by shadowing the dealers themselves, the Northumbria University research is finding that many of the mid and upper-level cocaine dealers in the city are also otherwise "above-board" businessmen using their combined expertise of legitimate business and crime to get ahead of the competition.

The two worlds facilitate each other. Genuine businesses – such as restaurants, property firms, antiques importers, nail salons, barber shops and taxi offices – are utilised as a source of start-up capital and as a way of cleaning tainted cocaine cash. The upshot is that cocaine cash is becoming increasingly intertwined within Newcastle's wider economy – and evidence from around Britain shows that Newcastle is not alone in this.

The research found that Newcastle's cocaine entrepreneurs have set up group investment schemes, where people use credit from above-board firms to chip in with other investors to buy wholesale amounts of cocaine, increasing everyone's profits. Some of those who contribute are distant partners who seek a return on their investment while ensuring there is clear blue water between them and the product. Others are happy to get involved in distribution, brokering large deals over drinks in top bars or selling it on to dealers who supply cubicle snorters across the city.

One businessman invested money from his taxi company and property that he owned to import cocaine into the UK from a Spanish supplier. Another dealer was part of a syndicate of smaller operators involved in various legal and illegal operations, which was buying wholesale from a crime family in the city. The syndicate members had legitimate concerns, including home furnishing stores, hotels, car washes, pubs and half-way houses, as well as extensive property portfolios.

Amid increasing poverty in the post-industrial North East, not everyone is able to become a legitimate business success. But a lot of people want it and everything that comes with it. For some, cocaine has enabled them to step up a gear, from mildly successful businessmen and workaday criminals to entrepreneurs living a cartoon flash lad's dream, surrounded by money, strippers and champagne – fuelled by the very white powder that is lining their bank accounts.

Despite their liquidity, most of these groups of men, in their thirties and forties, have stayed in the communities in which they were brought up. Most went to the same school. They have stuck together, going to the same parties, football matches and holidays. Their families all know each other. Some still live in the exact same council estates they grew up in, only with a customised Range Rover parked outside. It's more reminiscent of the era of the Krays than today's organised crime groups, whose members tend to leave their inner-city roots to move out to suburbia.

"The participants in this illegal economy should perhaps not be portrayed as gangsters or predatory drug pushers," says Craig Ancrum, a senior lecturer in Criminology at Teesside University. "The cocaine trade provides both a means of income and status in a disenfranchised post-industrial area which all too often fails to offer a viable alternative."

Ancrum says the rise of Newcastle's cocaine entrepreneurs comes amid "the increased commercialisation of leisure, increased emphasis on individualistic hedonism and the importance of 'ornamental consumerism' – being seen in the right places".

Drugs such as cocaine are cloaked by our leisure industry, but they also feed it. The more cocaine people take, the longer they stay in bars and the more money they spend. All the way along the supply chain, from Colombia to Newcastle, it is a drug that is particularly efficient in blurring the lines between legal and illegal economies. It is also a drug that has become a major accessory in the search for success, status and luxury amid the austerity and instability of post-crash capitalism.

@Narcomania / @alexandra_hall3

Alexandra Hall is a senior lecturer in criminology at Northumbria University

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