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U.S. Company Stops Sale of Chemical Used in Mexico Heroin Supply Chain | 2020-09-16

A U.S. company selling a chemical across Mexico that is essential for making heroin stopped all sales in the country after a Bloomberg Businessweek investigation found it was easily diverted to produce the drug fueling a U.S. epidemic. The decision was made public Tuesday as Mexican authorities said they were opening a criminal investigation.

Avantor Inc.’s stock price fell 1.5% percent after its disclosure, before paring losses.

The company has sold a chemical called acetic anhydride in jugs that are big enough to make lucrative quantities of heroin, but small enough to load into the trunk of a car. Although strictly regulated under international narcotics laws, the chemical was virtually unregulated in Mexico, where Avantor supplied a thriving retail market through bricks-and-mortar shops, distributors and online sellers, Bloomberg found.

It also found evidence Avantor’s product was used in drug labs in the two top Mexican heroin-producing regions across the last decade, and that it remained readily available despite regulations that took effect at the end of 2018.

“Due to the potential for misuse of acetic anhydride outside of the regulated supply chain, the company has recently chosen to stop all sales of the product in Mexico,” Avantor said Tuesday in an e-mailed response to questions. “We have properly discarded all inventory of acetic anhydride in Mexico.”

Avantor said it has never sold acetic anhydride to any distributors or retailers who weren’t registered with Mexico’s health regulator, known as Cofepris. It said it made the move out of “an abundance of caution” and informed its distributors and retailers about the decision in early September.

Federal prosecutors are looking into buyers who illegally use Avantor’s J.T. Baker brand of the chemical for the narcotics trade, said an official in Mexico’s attorney general’s office who is familiar with the investigation. Investigators with the office’s organized crime division also are focusing on sellers’ compliance with Mexican laws that regulate who can buy acetic anhydride, the person said.

Radnor, Pennsylvania-based Avantor is not a target of the criminal probe, said the official, who requested anonymity because he wasn’t authorized to discuss an ongoing investigation. The company said its global acetic anhydride sales are less than $1 million annually.

The Mexican authorities’ investigation was triggered by a Bloomberg Businessweek report that found that J.T. Baker-brand acetic anhydride had been easily diverted to make heroin in violation of Mexican law. Last week, in response to the report, Mexican President Andres Manuel Lopez Obrador said he wouldn’t allow chemicals made by companies in the U.S. or elsewhere to be used to make narcotics.

Mexican cartels have a veritable monopoly on the supply of heroin to the U.S., where thousands of people have died from overdoses. It’s impossible for drug cartels to make heroin and other narcotics without the right chemicals. Acetic anhydride is the only chemical required to make heroin from the sap of opium poppies.

More than 90,000 people in the U.S. died in heroin-related overdoses from 2010 through 2018.

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