CMA funerals investigation update

First published by Author on February 10, 2021 in the following categories: Consumer Law Industry Investigations Latest Pricing and tagged with cma | competition law | consumer law | funerals market | investigations | pricing

The Competition and Markets Authority (CMA) is carrying out a market investigation into the supply of services by funeral directors at the point of need, and the supply of crematoria services also. This article is a CMA funerals investigation update.

On the 16^th March 2020, the CMA announced their decision to extend the statutory deadline for this investigation by six months. The new deadline for this investigation is now currently set as 27^th March 2021, with all submissions until June 2020 being taken into account.

Launch of market study into the UK funerals market

On the 1^st June 2018, the Competition and Markets Authority launched a market study into the UK funerals sector. They have been looking at two core areas of the market, which is how competition works between funeral directors, and how it also works in the crematoria sector of the market.

In October 2018, Research Works and Ipsos MORI were commissioned by the CMA to understand the behaviour, experiences and decision-making of people who had recently engaged the services of a funeral director. This was to aid their investigations.

The CMA, according to their findings here, concluded the following:

Overall, we have found evidence that for a considerable number of years the largest firms of funeral directors have implemented consistently large annual price increases, without reference to underlying operating cost pressures.

We have reasonable grounds to suspect that these features prevent, restrict or distort competition in the UK. We have therefore decided to refer the supply of services by funeral directors at the point of need and the supply of crematoria services for a single in-depth Phase 2 market investigation.

CMA funerals investigation update

As part of a recent CMA funerals investigation update, the provisional decision report was published on the 13^th August 2020. The report provided a current summary of their findings whilst also  taking into account the impact of the COVID-19 pandemic that has undoubtedly resulted in a higher death rate. Given the pandemic, there has been a material change in the circumstances for the investigation.

The CMA funerals investigation update came to a provisional conclusion as follows:

We therefore provisionally conclude that the markets for funeral director services at the point of need and crematoria services are not functioning well. We have provisionally found that a number of features restrict or distort competition:

(a) Low level of customer engagement caused by the intrinsically challenging circumstances surrounding the purchase of a funeral

(b) Lack of easily accessible and clearly comparable information on the products and services provided by funeral directors, including their prices and levels of quality

(c) Lack of visibility to customers of the level of quality of care given to the deceased by funeral directors

(d) High barriers to entry in the supply of crematoria services (e) High levels of local concentration in the supply of crematoria services.

Information is sourced from the CMA here.

Next steps in the investigation

Whilst the CMA funerals investigation update has given us a provisional conclusion, there is still time for more developments before the final deadline. The outcome could differ from the provisional conclusion, and the CMA will hopefully provide next steps to resolve the outlined issues.

We will continue to update you of any further updates from the CMA as they look into whether there have been any breaches of vital competition laws.