Archive: 2 July 2012

The departing board chairman of Golden Charter funeral plans offers this cold sweat-inducing warning to independent funeral directors in a valedictory address in the Golden Charter newsletter, Goldenews, which we are grateful to have had forwarded to us. He says:

Co-op and Dignity have both acquired significant additional scale, and unquestionably they are operating with a better financial model than independents – on their own – can hope to achieve. There will be no softening of their ambition and there will be greater local commercial pressure. We can also expect consolidation to come from other quarters, particularly private equity.

Not only are these two corporations and private equity seeking to dominate the funerals market, they are making substantial in-roads into the crematoria market. The strategy is to provide future control of and access to crematoria which will potentially form a risk to independents and the prices that they will have to pay.

Corporations like to deal with corporations, and Co-op and Dignity present like-minded opportunity to the insurance companies. In 2007, an over 50’s plan was merely a means of building a financial provision for a funeral – the question of service provision did not come into it.

However, the insurance companies now manage 60 per cent of funds subsequently to be used to pay for a funeral, and it is a reality that they exert considerable influence over who carries out a funeral.

The funeral industry is one of the last bastions for independents. Almost every other market sector has fallen to national or international consolidation. Over the next five years, the choice for an independent funeral director is simple: sell to the competition or come together and exploit your collective strength.

This remains a chilling analysis even after you factor in the chairman’s sales pitch: ‘Over the next five years, the choice for an independent funeral director is simple: sell to the competition or come together and exploit your collective strength. Golden Charter is the only credible collective umbrella.’

Consolidation, done well, benefits consumers and shareholders. The present corporate players will fail to grow their market share if they don’t address pricing, service and positive brand identity, and they don’t look as if they’re going to hack it. But there are unquestionably opportunities for the right player with a brand that dares to speak its name. As we like to say, if John Lewis did funerals…

The days of the independents just have to be numbered, don’t they? Come on, look at your high street and go figure. 

Or do they? 

Consider the work of the Campaign for Real Ale (CAMRA). Among its many successes it lists these: 

• Created a rich and varied choice of real ale – In the 1970’s CAMRA successfully fought the efforts of the big brewers to replace traditional ales with tasteless keg beers. Since seeing off the likes of Watneys Red, Tavern Keg and Double Diamond the campaigning efforts of CAMRA has seen the creation of hundreds of new breweries producing a wonderful array of real ales. 
• Smashed the Big brewers stranglehold on UK pubs – In the 1970s and 1980s the Big Six brewers, Allied, Bass, Courage, Scottish & Newcastle, Watneys and Whitbread monopolised regions of the country. CAMRA lobbied against this lack of choice in Britain’s pubs and gradually eroded these regional monopolies. 
• Number of Breweries increased Fourfold – Since CAMRA was founded the number of breweries operating in the UK has grown fourfold to over 840 breweries. Without CAMRA’s presence it is doubtful whether real ale would be as widespread as it is today.