CMA report: what you need to know
As the Competition & Markets Authority’s legal order lands, SAIFInsight examines what it means for funeral directors.
The CMA has been investigating the funeral services sector since June 2018, with its final report published on December 18, 2020. There are three elements which the final report has focused on:
1. Transparency of pricing and the economics of funeral pricing.
In the final report, evidence was gathered which illustrated that the corporate sector had evoked concern regarding higher pricing.
The CMA recognised that Independents were best value. The disappointment to the SAIF-CMA Regulatory Taskgroup is that the CMA did not take a segmented approach to regulating the sector according to size, company structure and firms that charged inflated prices in the first place.
2. The CMA has considered price-capping or creating a pricing regulator for funeral directors.
3. The CMA also paid attention to SAIF’s concern for quality control and standards of operations in service delivery to clients.
The SAIF-CMA Regulatory Taskgroup have been outstanding in serving and representing the needs of the independent sector. Jeremy West, Sean Martin, Paul Allcock and Joseph Murren have been strong advocates for Independents across the UK throughout the investigation and continue to engage with the CMA.
What is the result of the CMA final report?
By the time this edition reaches you, the CMA will have published a legal order which was due on June 17. This means that after an implementation period it will become a statutory requirement for online pricing to be displayed in a particular way mandated by the CMA.
The CMA has proposed a three-month implementation period, so by mid- September 2021 all funeral directors must have a prescriptive pricing list that is one click away from the home page on their own website, and any third-party websites. The list must also be in PDF format to make it easy for the consumer to download and print.
SAIF’s latest response to the consultation highlighted serious concerns on behalf of our members. We questioned the need for A2-sized posters with prices in reception offices and the inclusion of crematoria and cemetery fees of those within a 30-minute cortege range from the funeral home.
We also requested that the implementation period be extended to six months, which means this statutory requirement would commence in mid-December 2021 instead of mid-September 2021. This allows time for funeral directors recovering from the global pandemic to prepare for statutory online pricing.
SAIF will be providing guidance notes on all matters and members are invited to a webinar, led by Paul Allcock (SAIF’s UK Government Liaison) with Joseph Murren (SAIF Scotland Government Liaison), Mark Binnersley (SAIF’s PR and Policy Advisor) and CEO Terry Tennens. This will take place from 3-4pm on June 22, so please ensure you register for this event when the email invitation is released.
The CMA has paused its decision for a price cap on funerals, or a price regulator. However, for member firms who have five branches or more, the CMA will conduct financial revenue monitoring.
SAIF petitioned that this was shifted from January and July each year to April and October, to respect the peak season for funerals.
The CMA will finalise the layout of the monitoring form on June 17, 2021, and SAIF will be providing guidance notes to members in this category.
There remains the threat that the CMA could instigate a second Market Investigation Report (MIR) and implement a price cap or price regulator. SAIF strongly opposes this.
The above CMA orders cover all four nations of the UK. However, for quality control and standards of operations, the CMA recommended that statutory inspectorates should be established for England, Wales and Northern Ireland.
However, the Ministry of Justice reponded on June 7 stating its preference for a voluntary code of practice and co-regulation with the sector. SAIF had strongly opposed the establishment of a statutory regulatory body similar to the Care Quality Commission as costs would have been disproportionate and have had an adverse impact on the cost base for smaller Independents in England.
The Scottish Government has deployed a statutory inspectorate and a mandatory Code of Practice and registration for all funeral directors will occur shortly, timelines are to be advised.
SAIF will be preparing templates and guidance notes through the summer to assist members as we prepare for statutory online pricing. This is a mandatory requirement, so the CMA will be actively monitoring the sector and has powers of enforcement from fines to court orders for sentencing.
Please factor in this task with your own website, and if you do not have a website, a third party, open-source website where your pricing can be accessed, specifically laid out as the CMA by legal order has prescribed.
The June 22 webinar on the CMA legal order will be recorded and available on the members’ area of the SAIF website.
Watch out for alerts on email or Slack as we will share the CMA’s legal order details, SAIF’s guidance notes and templates, and notify you of further online support meetings.Tags: CMA, Competition & Markets Authority, law, legislation, regulation, SAIF, taskgroup