Covid-19 stymies plan for funeral price controls
By Sean Farrell
Date: Thursday 13 Aug 2020
(Sharecast News) - The UK' competition regulator has scrapped proposals for price controls on funeral operators because of disruption caused by the large number of deaths from Covid-19.
The Competition and Markets Authority had previously set out plans to regulate prices for the sector after funeral costs rose significantly faster than inflation for more than a decade.
But on Thursday the CMA said the surge in deaths from Covid-19 had made it difficult to get data from funeral operators and to forecast future revenue and profit for the sector. Government restrictions during the pandemic have also changed the kinds of funerals available, making remedies harder to formulate, it added.
The CMA said it still saw price controls as a potential remedy and would consider holding a further investigation into the sector when the market had settled down from Covid-19 disruption.
Shares of Dignity, the publicly traded funeral director, rose 18.6% to 462.5p after the announcement.
The CMA repeated its charge that the funerals sector was not working well but said Covid-19 had created "insurmountable" obstacles to extensive improvements. Price controls could not be introduced safely during a national emergency, the CMA said, adding that it had no power to suspend or extend its investigation.
The regulator said it would require funeral directors to present their prices clearly to help people decide what funeral they wanted. It will also monitor the sector and require quarterly data from operators and recommend an inspection and registration scheme similar to the one in Scotland for the rest of the UK.
Clive Whiley, Dignity's chairman, said: "Dignity has engaged openly and collaboratively with the Competition and Markets Authority throughout the funerals market investigation. We will take the time to fully assess the CMA's provisional decision report and its recommendations and will continue to constructively engage directly with the CMA through the statutory process."
Independent retail analyst Nick Bubb said: "It looks as if Dignity has got away with it as the CMA's plan to introduce price controls has been scuppered by the problems caused by the upsurge in Covid-19 deaths."
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