‘Serious concerns in the funeral sector’ identified by CMA

Fran Hall

 

 

The Competitions and Markets Authority are proposing a major funerals probe after identifying serious concerns in the funeral sector.

It’s a long read – 133 pages – find the full interim report on the Funerals Market Study page here (scroll down for ‘Interim report and consultation’.

We publish this morning’s press release in full below:

‘Today’s interim report presents the issues the Competition and Markets Authority (CMA) has identified since launching a Market Study into the funerals sector 6 months ago.

Its initial work indicates problems with the market that have led to above inflation price rises for well over a decade – both for funeral director services and crematoria services. The scale of these price rises does not currently appear to be justified by cost increases or quality improvements.

Given the nature and significance of the issues the CMA has identified, it believes the full powers of a Market Investigation – carried out by an independent group of CMA panel members – are required. Issues include that:

  • Today, people generally spend between £3,000 and £5,000 organising a funeral, and the price of the essential elements has increased by more than two-thirds in the last 10 years, almost 3 times the rate of inflation. Organising a funeral would now cost those on the lowest incomes nearly 40% of their annual outgoings, more than they spend on food, clothing and energy combined.
  • Customers could save over £1,000 by looking at a range of choices in their local area. However, people organising a funeral are usually distressed and often not in a position to do this – making it easier for some funeral directors to charge higher prices. Prices are also often not available online, making it difficult to compare options.
  • While some smaller funeral directors have sought to keep their prices low, other providers – the larger chains in particular – have implemented policies of consistently high year-on-year price increases. A number of these have now introduced lower cost funeral options, but this doesn’t go far enough to make up for years of above inflation price hikes. The CMA’s evidence also indicates most people who organise a funeral remain extremely vulnerable to exploitation and future rises in charges.
  • Cremations account for 77% of funerals, yet there are limited choices for most people in their local area and fees charged by crematoria have increased by 84% on average in the past 10 years, more than 3 times the rate of inflation.

Andrea Coscelli, chief executive of the CMA, said:

“People mourning the loss of a loved one are extremely vulnerable and at risk of being exploited. We need to make sure that they are protected at such an emotional time, and we’re very concerned about the substantial increases in funeral prices over the past decade.

We now feel that the full powers of a market investigation are required to address the issues we have found. We also want to hear from people who have experienced poor practices in the sector, so that we can take any action needed to fix these problems.”

The CMA will now be consulting on the potential market investigation reference and welcomes any views on the issues identified in its report by 4 January 2019.

It would also like to hear from people involved in the industry and others, who may have observed instances of poor quality standards in the back-of-house facilities of funeral directors. Details on how to respond are available on the funerals market study page of the CMA website’

 

 

 

 

 

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ANDREW PLUME
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ANDREW PLUME

Having just ‘sped read’ through the entire Report, one word has been frequently used i.e. “fragmented” – and as followers of this blog will know this is an expression that has often been used by Dignity in their on-line Reports, personally I find it condescending and is almost a shot aimed by Dignity at the Independents

And there’s absolutely no surprise from the Report that Dignity comes out of this unfavourably after all they’ve been the ‘main driver’ in keeping prices at such a ridiculous level……………………

Andrew

ANDREW PLUME
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ANDREW PLUME

An interesting statement here – “Funeral firms ‘took advantage of grief’, says Co-op boss…”

https://www.bbc.co.uk/news/business-46430520

Andrew

public
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public

So how are they going to hear from the public? And instead of looking at cremation market separately they should be doing both together and seeing the impact on the public and independents of small number of big chains owning both the funeral directing business and many of the crematoria too. Of course that affects how things work for the “independents” and the public.

Roger Mathers
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Roger Mathers

Glad to see report well behind the times this should have happened years ago industry needs a big shake up For large & small funeral providers need to clean up the profession I have seen good & bad practice in large & small providers over the last 28 years I have worked for both Ball now in Leaders court of all providers now need to put prices on own website NAFD & SAIF need to make it part of their membership to all members they could do that straight away tomorrow A start price is needed for for all Funeral… Read more »

David Holmes
Guest

No surprises here, we are (in the business) well aware of the high prices charged by corporate funeral directors, and that these high prices don’t usually equate to a better service. In reality, the bigger firms can offer the poorest value. Local authorities and corporate owned crematoria have also pushed their prices far higher than can be justified – buying a cremation or grave can be like supporting a football team, you are a captive market because you can’t easily go elsewhere. There is ‘only’ your local, a Spurs fan is a Spurs fan for life, regardless of how much… Read more »

ANDREW PLUME
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ANDREW PLUME

Hi David

Coroner’s Removal Contracts – In their submission to the CMA, ‘Beyond’ have highlighted this:

“…….Coroners/police contracts – many companies bid, some at zero cost, to provide removal contracts for deaths at home, out of home etc. Although guidelines typically stipulate that the collecting cannot market to the family, it is our understanding that many do and that most of the time the family will end up staying with that funeral director. There is also evidence that funeral directors will charge removal and storage fees to someone if they decide…….”

Andrew

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toby angel
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The most frustrating element in this (much needed )conversation is the lack of representation from the key stakeholder – the public, the families being abused at their most vulnerable time. Trade organisations principally work for the members, and by default their clients are a lesser priority. There are many independent funeral directors working with integrity, serving families with respect, and operating with commercial pragmatism. We must not fall into the trap of ‘labelling’ the industry with the same disreputable practices. Neither should Government rely on the behemoth FD corporations for insight. The Good Funeral Guild is the only association working… Read more »

ANDREW PLUME
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ANDREW PLUME

Greta points here Tony Certainly agree, where is the input from “the key stakeholder…”? And ditto, “….the behemoth FD corporations…” who are of course solely responsible for this shambles And fwiw, I’ve just sent this to the CMA:- “…..Dear Sirs I have read with much interest your very solid and commendable Interim Report into the Industry Although not either a Funeral director or employed by one, I am a life long career professional undertaking Probate and allied work largely for firms of Solicitors. As such I have considerable experience of the Funeral Industry and am in something of an unusual… Read more »