December 2018 – The Good Funeral Guide

Time to speak up

Dear Reader

Are you connected to funerals in any way?

Are you somebody who has an interest in what goes on in funeralworld?

Have you had to arrange a funeral, or had to think about funeral arrangements for someone close to you?

Or do you work in the funeral sector?

Have you seen or heard things that you know are just wrong?

Are you concerned about aspects of your work, prices that you can’t justify to clients, procedures that you have to follow that you find uncomfortable, things that have gone on behind the scenes that worry you?

Have you been a bit busy recently and not got round to responding to the consultation launched by the Competition and Markets Authority at the end of November?

YOU’VE ONLY GOT FIVE DAYS LEFT.

(We wrote about the CMA’s Interim Report on the blog here and here if you want to refresh your memory)

Comments are invited on the CMA’s provisional decision to make a market investigation reference (MIR) in relation to the supply of services by funeral directors at the point of need and the supply of crematoria services in the UK.

Such comments should be provided no later than 5pm on 4 January 2019 to:

Funeral market study team

Competition and Markets Authority

Victoria House

Southampton Row

London

WC1B 4AD

E-mail: funerals@cma.gov.uk

This is hugely important.

It could completely change the landscape of the funeral sector for the benefit of people who need to arrange funerals. And that, effectively, will be all of us.

Please, make sure that the CMA hears from people from all walks of life who have an interest in how the funeral sector is currently operating.

If you have relevant experience or thoughts on the proposed investigation into the funeral sector, then make your voice heard.

If you don’t take the time to write and tell the CMA what you think, the responses received will be dominated by replies from corporate funeral operators and trade associations.

Your experience matters.

Your opinion matters.

You are the people the CMA need to hear from.

It’s time to speak up.

The full interim report and details of the consultation can be downloaded here, along with the findings of the research commissioned by the CMA to understand the behaviour, experiences and decision making of people who had recently engaged the services of a funeral director.

The report is a lengthy document but well worth reading – if you haven’t got time to do so, then here is a precis of what the CMA is inviting comments on:

‘The CMA considers that this interim report identifies significant concerns about the effectiveness of competition in relation to the supply of funeral services at the point of need and the supply of crematoria services in the UK.’

‘The CMA welcomes representations from interested parties on the provisional decision set out in this document. The CMA wishes to stress the importance of the consultation process in assisting the CMA’s decision making and urges interested parties to engage with the consultation. Respondents may wish to reply in relation to the supply of services by funeral directors at the point of need, in relation to the supply of crematoria services, or both. In doing so, respondents may wish to consider the following questions:

Do you consider that the CMA’s analysis is correct with respect to the suspected features of concern in the supply of:

services by funeral directors

‘8.31 Based on the evidence and our analysis set out in section 4, our provisional view is that there are reasonable grounds for suspecting that one or more of the following features or combination of features prevents, restricts or distorts competition in the supply of services by funeral directors at the point of need in local areas:

Customers’ vulnerability and difficulty in engaging at the point of need.
Customers’ unresponsiveness to measures of price and quality; they largely choose a funeral director on the basis of recommendation or personal experience.
Customers’ inability to assess certain aspects of quality and the value for money of all options offered given funerals are an infrequent purchase and customers are often inexperienced.
Lack of transparency: reluctance of firms to publish / disclose clear prices (including online) or to provide comprehensive information on quality and range.
Point of sale advantage: ability of suppliers to largely control the decision-making process leading to the sale and its outcome.
Ineffective self-regulation in respect of information transparency – no mandatory publication of online prices, absence of publication of inspection reports.’

crematoria services

‘8.33 Based on the evidence and our analysis set out in section 5, our provisional view is that there are reasonable grounds for suspecting that one or more of the following features or combination of features prevents, restricts or distorts competition in the supply of crematoria services in local areas:

Customers’ vulnerability and difficulty in engaging at the point of need.
Customers’ unresponsiveness to measures of price and quality; they largely choose a crematorium on the basis of location or personal experience.
Low numbers of crematoria providers in local areas.
High barriers to entry arising from the planning regime and high fixed costs, which limit the number of crematoria in each local area.’

Do you consider that the CMA’s analysis is correct with respect to the reference test being met in relation to the supply of:

services by funeral directors at the point of need (see paragraphs 8.12 to 8.37) and
crematoria services (see paragraphs 8.12 to 8.37)?

Do you agree with the CMA’s proposal to exercise its discretion to make a reference in relation to the supply of services by funeral directors at the point of need and the supply of crematoria services (see paragraphs 8.38 to 8.96)?

Do you consider that the proposed scope of the reference as set out in the draft terms of the reference in Appendix F, would be sufficient to enable any adverse effect on competition (or any resulting or likely detrimental effects on consumers) caused by the features referred to in paragraphs 8.31 and 8.33 to be effectively and comprehensively remedied?

Do you consider that the features which the CMA has identified that may prevent, restrict or distort competition are capable effectively and comprehensively remedied by UILs (undertakings in lieu of a MIR)?

Do you have any view on our current thinking on the types of remedies that an MIR should consider (see paragraphs 8.66 to 8.86)? Are there other measures we should consider?

Funeral director services:

Transparency remedies
Changes to the regulatory framework
Establishment of a regulatory body
CMA-led price regulation

Crematoria

Establishment of sectoral regulator or price regulation
Guidance to local authorities
Changes to the planning system

Other possible remedies

The CMA would particularly welcome any specific evidence from respondents in support of their views.

In addition to the above, the CMA would also welcome evidence and views on the following matters:

Quality of care of the deceased: we have received anecdotal evidence that there may be varying standards of care being applied by funeral directors and would like to understand how widespread such issues may be. We would therefore like to hear from people who have witnesses standards of care which they considered to be unacceptably low.
Issues specific to religious groups that are not covered in this report: we have focused our work on the transactional aspects of funerals involving funeral directors and crematoria. We believe that the issues we have identified in relation to those specific aspects would essentially be similar across all faiths (to the extent that the way they organise funerals involves transactions with funeral directors or crematoria. We are keen to find out whether we may have overlooked any issue of relevance and will seek to engage actively with the representatives of the major faiths.

Our intention is to publish on the CMA’s website an aggregated and anonymised summary of submissions from individuals, although if you prefer, you can indicate that you would prefer for your response to be published in full.

We intend to publish all responses from business and other organisations on the CMA’s website, except those responses marked as confidential. Respondents may request that their response be kept confidential. If you would like your response to remain confidential, clearly mark it to that effect and include the reasons for confidentiality. Please restrict any confidential material to the appendices to your response.

We will redact, summarise or aggregate information in published reports where this is appropriate to ensure transparency whilst protecting legitimate consumer or business interests.’

We have a chance to make a change. Right now.

Do you want to improve things for bereaved people? Do you want to be a responsible citizen who stands up for what they know is right?

Then find ten minutes to tell the CMA what you think.

Thank you.

Well said Louise!

The CMA interim report on the funeral industry is taking time to digest across funeralworld.

It’s not surprising, it’s a chunky document. And it’s possibly proving quite indigestible for some, particularly the PR teams at Dignity, Co-op and Funeral partners.

The essential conclusion is – the funeral sector is not functioning well. Competition is not working effectively, price rises can’t be justified, and bereaved people are at risk of being exploited.

AT LAST!!!!

Finally, an official body is seeing what we have been pointing to and writing about for years.

And an official body with clout. The CMA proposes to make a Market Investigation Reference (MIR) into both the funeral market and the cremation sector.

This in turn could lead to recommendations to government to impose transparency requirements, changes to the regulatory framework regarding funeral directors or the establishment of a regulatory body, with the possibility of CMA-led price regulation.

The interim conclusion found that:

The extreme vulnerability of customers has been a major factor in enabling suppliers to charge high prices in the sector for the past 15 years, rather than underlying cost pressures, and it appears to us that Dignity’s pricing policies have acted as the engine of these price rises, with others in the market appearing to follow its lead. This is true in relation to funeral director services, and, to a lesser extent, funeral services.
In addition to large annual price increases, the supply of funeral services is characterised by large price differentials between suppliers, including within local areas. Such wide price differences appear hard to explain on the basis of cost, range, quality and brand differences between suppliers.
The yearly high price rises implemented by the major suppliers have directly boosted their profit margins for a persistent period of time, The EBITDA margins of Dignity have been well above international benchmarks, while those of Co-op and Funeral Partners are at the higher end of them.
When considering these profit margins alongside long-term policies of large price rises unrelated to underlying cost pressures, it seems clear to us that this is a market that is not functioning well, to the detriment of vulnerable consumers.

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 two funeral directing trade associations don’t fare too well either, in particular the NAFD who nominates itself as ‘the Voice of the Profession’. Among their members they number Dignity, Co-operative Funeralcare and Funeral Partners Ltd. The three companies mentioned directly by name as profiting substantially from yearly high price rises are members of the NAFD.

“We recognise that trade associations bring a number of benefits to their members and may also be of benefit to consumers. However the evidence we have seen indicates that the two trade associations have fallen short of bringing about the level of transparency that is necessary to facilitate consumer choice. The evidence also indicates that the trade associations’ focus on supporting the commercial interest of its members may have been detrimental to competition, as illustrated by the approach taken to matters relating to online price transparency and the development of online comparison tools.”

So, all not so rosy for the Voice of the Profession, despite the NAFD PR statement in response which oddly seemed to have missed the point made by the CMA about their failings (it’s at point 4.101 on page 64).

This morning, BBC Radio 4 Sunday programme invited the current president of the NAFD to debate funeral costs with Louise Winter, founder of Poetic Endings (GFG Recommended funeral director and member of the Good Funeral Guild).

Listen here from 35 minutes 44 seconds.

It was an interesting few minutes.

We’d like to suggest that the NAFD explores the meaning of ‘debate’ as opposed to bulldozing through a discussion without drawing breath and requiring the other person to have to interrupt to make their point. Talking for over half of the allocated eight minutes is not good manners.

Here are a few excerpts:

From the NAFD representative in response to the suggestion of price capping:

“In some cultures, there is a necessity to spend money on a funeral as a mark of respect for the person who has died so you have to be very careful about making sweeping statements..”

Louise’s response: “That does not give the big corporates whatever price they want, well above the inflation rate every year, with their sole intention being to make as much money as possible for their shareholders. The people who are doing this are members of your organisation, your trade association, which supposedly exists to protect bereaved people and to help them have the funeral they want. It’s not. It’s just protecting the funeral directors and the costs that they are charging.”

NAFD response: “We protect bereaved people by giving them access to standards that can be guaranteed and a scheme of independent redress should something go wrong..”

And Louise cut in with “And outrageous prices, with no transparency, with only a third of your members putting their prices online”.

Worth a listen!