INVOCARE, the largest funeral provider in Australia, has proposed to purchase 100% of Bledisloe Group Holdings Pty Ltd, one of the largest funeral companies in Australia and New Zealand and recently made a public company with shareholders.
If the takeover is successful, InvoCare will significantly increase its market share in Australia and New Zealand.
InvoCare’s share price rose 5.5 per cent to AUD $7.29 following its announcement to take over Bledisloe.
In the business of dying, it pays to be big.
At the moment, one in five funerals in Australia are conducted by InvoCare and the ratio is much higher in Sydney, where it’s estimated to be closer to one in two.
The takeover is currently before the Australian Competition and Consumer Commission (ACCC). CPSA made a submission to the ACCC opposing the takeover because of the reduction in competition.
Bledisloe owns Gregory & Carr Funerals, Boland Funerals and Metro Funerals.
There is no regulation regarding the price of a funeral. The NSW Government has given no support for the regulation of the price of a Basic Funeral (which is a regulated product in terms of its contents, but continues to be optional for funeral providers).
CPSA considers competition is the only way to lower the price of funerals.
Economic rationalist principles that assume the market will sort out everything do not sit easily within the funeral market.
Firstly, few have a choice about whether they need to purchase a funeral or not.
Secondly, people are likely to purchase a funeral when distressed and so are not in a frame of mind to make rational choices about the funeral they purchase, nor are they likely to shop around.
Thirdly, most people purchase only one or two funerals in their lifetime and therefore do not gain a good knowledge of the product that they are purchasing. Fourthly, one must generally purchase a funeral in a specific location, and cannot necessarily choose another undertaker in another area when purchasing a funeral.
Consequently, the customer is like putty in the undertaker’s hand.CPSA will keep VOICE readers informed of the outcome of the ACCC’s inquiry.