A gang of drug traffickers has found a way of improving their cocaine sales, say Brazilian police – by sticking pictures of Amy Winehouse in the bags.

The clear plastic bags contain a paper insert with a picture of the troubled singer, who died on July 23 in her north London home, along with the name, “Amy House”.

Lieutenant Colonel Glaucio Moreira, who led a police raid in the Manginhos, a shanty town in the north of Rio de Janeiro, said bags of cocaine with Winehouse’s picture in them were being sold for between 10 and 25 reals (£4-£10).

He added: "Since there is so much information in the media that she was a drug user, the traffickers have taken advantage of this."

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Police confiscated automatic weapons and grenades. They also found bags of marijuana and crack cocaine, some carrying images of dead Al-Qaeda leader Osama bin Laden.

Local reports say there was a shootout between dealers and the police during the raid.

Rio is set to host the football World Cup in 2014 followed by the Olympic Games in 2016. Police have cracked down on violence and crime in slums in the run up to the sporting events.