CMA launches funerals market investigation

28 Mar 2019 11:50 AM

The Competition and Markets Authority (CMA) yesterday launched an in-depth market investigation into the funerals sector.

Following publication of its interim report in November 2018, the CMA consulted on whether to progress to a market investigation. Having carefully considered the consultation responses, the vast majority of which were supportive of the proposal, the CMA remains concerned about the effectiveness of competition in the funerals sector and will therefore 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. Funerals typically cost several thousand pounds which is a significant outlay for households.
• 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. 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 8 years and some local authorities have also implemented large increases in fees.

The purpose of a market investigation is to further examine the competition concerns identified and decide what action, if any, is appropriate. The CMA has power to make legally binding orders requiring changes to be made.

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 yesterday produced advice for those who need to arrange a funeral, so that some additional support is available to people immediately.

A report of the CMA’s market study, and further information relating to the market investigation are available on the funerals market study page.