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Dignity dives as CMA launches probe into £2bn funeral sector
The Competition and Markets Authority is launching a review into the £2bn funerals market, it announced on Friday, in a bid to ensure customers are not getting a bad deal.
It said the market study would examine whether the information provided by funeral directors on prices and services was clear enough for people to be able to choose the best option for them.
Shares in listed funeral services provider Dignity fell 18% to 999.5p on Friday after the CMA announcement was made.
The regulator said it would also look at how prices had changed over time, and the factors that affected them.
It said the average cost of a funeral was nearly £3,800 in 2017, and that was before counting extras that could apparently add another £2,000 to a bill.
Affordability and debt could therefore be a real concern to many people, the CMA claimed, with those on the lowest incomes potentially spending up to one third of their annual income on a funeral.
The rising level of cremation fees would be considered as part of the review as well, the regulator confirmed, with cremations now estimated to account for around 75% of all funerals.
In parallel to the CMA's market study, HM Treasury was launching a separate Call for Evidence on regulation in the pre-paid funerals sector.
As a result, the CMA said it did not intend to examine the pre-paid sector within its market study.
"People can understandably be very emotionally vulnerable when planning a funeral," said CMA senior director of markets Daniel Gordon.
"We therefore think it is important that - at what can be a particularly challenging time - the process is made as easy as possible.
"As part of this study, we want to ensure that people can at least receive clear information on prices and the services making up a funeral, and that people get a fair deal on the cremation fees charged."
The CMA said views were welcome on any of the issues raised in the statement of scope before 28 June.
An interim report, presenting initial findings and views on potential remedies, would be published in six months, ahead of the final report in a year's time.
If it finds issues of particular concern, the CMA said it could take further action, such as opening consumer or competition enforcement cases or launching a full market investigation.