Following publication of its interim report in November 2018, the CMA consulted on whether to progress to a market investigation.
The responses to the consultation was vastly supportive of the proposal and the CMA said it remained “concerned about the effectiveness of competition in the funeral sector”. As a result, it will proceed to carry out an in-depth market investigation.
The investigation will focus on the supply of services by funeral directors and the supply of crematoria services.
The CMA’s concerns include:
- The rise in cost of organising a funeral, the essential elements of which have increased by 6% each year – twice the inflation rate – for the last 14 years.
- The vulnerability of many people when organising a funeral, which may mean that they are not in a position to look at a range of choices. The CMA said this appears to have made it easier for some funeral directors to charge high prices.
- Reluctance of firms to publish/disclose clear prices, including online, or to provide comprehensive information on quality and range, making it difficult for people to compare funeral directors.
- Low numbers of crematoria providers in local areas, and difficulty for new companies to enter the market due to the planning regime and high fixed costs.
- High prices in relation to crematoria services – the largest private operators have implemented average price rises of between 6% and 8% each year for the past eight years and some local authorities have also implemented large increases in fees.
The investigation will be conducted by a group drawn from the CMA’s panel of independent members, chaired by Martin Coleman. The other members are Richard Feasey, Sheila McClelland and Karthik Subramanya.
Alongside the market study, in conjunction with Age UK and the Money Advice Service, the CMA has produced advice for those who need to arrange a funeral, so that additional support is available immediately.
Terry Tennens, chief executive of the National Society of Allied and Independent Funeral Directors, said: “The CMA’s decision to conduct a market investigation comes as no surprise, given the concerns outlined in the authority’s interim report on the funeral market last November.
“Many family-run funeral firms across the UK will welcome this decision but with the caveat that the panel’s investigation is thorough and gathers information and evidence from a wide range of stakeholders, in order to ensure any follow-up remedies are proportionate and do not result in small firms facing an unrealistic regulatory burden.”
He added: “We agree with the CMA’s concerns but it’s important that a distinction is made between the behaviour of family-run firms and large chains and crematoria operators. The latter two have significantly hiked prices in recent years in comparison to independent funeral director businesses. We hope the investigation panel will remain aware of this throughout its inquiry.
“In terms of concerns around online pricing, we’re working with partners across the funeral sector to agree a website price template which will provide the public with a format that enables easy comparison of funeral director prices. In the meantime, we urge all our members with websites to display their prices online.”