Shares in funeral company Dignity surged nearly 40 per cent today after the Competition and Markets Authority (CMA) said it would not introduce price controls because of the coronavirus pandemic.
Dignity shares jumped 38 per cent to 540p. The company said it was considering the CMA’s report in detail.
An investigation into the sector, focusing on funeral directors and crematoria services, was launched in March last year after a market study in 2018 revealed high prices were charged, taking advantage of grieving families.
“Further change in the sector is necessary but some of the remedies we were considering could not safely be introduced in the middle of a national emergency,” CMA panel inquiry chair Martin Coleman said in a statement.
“Our proposals will hold open the door to price controls when circumstances created by the pandemic change sufficiently to permit these to be considered,” Coleman added.
In the short term, the CMA has provisionally decided that funeral directors and crematoria will be required to provide customers with information and prices of various services and packages they offer, and will also need to give the regulator key financial data every quarter.
Dignity, which owns 800 funeral locations and operates 46 crematoria in Britain, reported last month an 11 per cent rise in profit as it conducted more funerals due to the pandemic, even as the average price per funeral fell as people chose simpler services.
Clive Whiley, executive chair of Dignity, 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.”
The National Society of Allied and Independent Funeral Directors (SAIF) said in a statement that it “cautiously welcomed” the CMA’s findings.
“It has been an incredibly challenging year for the funeral profession, which has faced a combination of increased costs linked to PPE, additional staff hours, and temporary mortuary storage, and reduced funeral prices as a result of restricted funerals,” it said.
“As such, SAIF looks forward to cooperating with the CMA and partners across the funeral sector in the coming months to establish a regulatory regime that works with a market that has changed beyond recognition because of the effects of covid-19.”
Sam Tyrer, MD of Co-op Funeralcare, said: “The Co-op has taken a range of steps to significantly reduce funeral price and as the CMA notes, the market has adapted at pace to respond to the devastating loss caused by coronavirus.
“We have fully engaged with the CMA through the process and look forward to continuing to do so in the coming months to secure the best outcome for bereaved families.”