Undertakers To Abandon Agreement On Funerals

Press, Volume XCIX, Issue 29383, 9 December 1960, Page 14

Undertakers To Abandon Agreement On Funerals

(New Zealand Press Association)

WELLINGTON, December 8. Funeral directors are not to be bound by a minimum charge of £39, plus disbursements, for an adult funeral, and will be allowed to tender individually to the Crown and hospitals for contract burials. This decision was reached by the Trade Practices and Prices Commission today. The commission had been inquiring into an arrangement or agreement among members of the Federation of Funeral Directors about funeral services. The Commissioner of Trade Practices and Prices (Mr H. L. Wise) said that in his opinion competition would be limited, and recommended the termination of existing agreements under which individual members did not tender. He also recommended the rescinding of the minimum charge resolution. The chairman of the commission (Mr S. T. Barnett) said that by consent an order of the general effect sought would be made, and counsel were invited to submit an agreed draft within 14 days. Counsel assisting the commission was Mr G. S. Orr. Mr W. E. Leicester appeared for the federation. Mr Wise’s report said the Federation of Funeral Directors had five member associations showing a total membership of 140 funeral directors. There were 28 funeral directors not listed as members, two of them being in Auckland, but most of them in small towns and'remote areas. The federation had registered certain details of an agreement with the Crown under which funeral and burial services were provided by members of the federation for certain members and former members of the armed forces, and with the police covering the removal of bodies. Conference Decision Also registered was a federation conference resolution of 1958 that the minimum charge for an adult funeral (non-contract) be not less tljan £39, plus the usual disbursements.

The Government Stores Board arranged contracts for funerals from mental hospitals. When the contracts were last reviewed, tenders were received from each association in Auckland, Wellington, Canterbury, and Otago, but not from any individual member of those associations, the report said. The report said that hospital boards were responsible for arranging funerals for the indigent dead (charitable aid funerals), and the bigger boards called for tenders from time to time. Where tenders were called, association members did not submit individual tenders (except perhaps where only one member operated), the association usually submitting a single tender on behalf of its members. In smaller districts, where not more than one funeral director might be operating, individual arrangements were usually made by the smaller boards with such funeral directors as the rather rare occasion required. Mr Wise listed the essential features of the agreements as:— Armed Services: The federation negotiated an agreement and no competitive tenders were called fqr or received, notwithstanding attempts by the Crown to negotiate. The price of a basic funeral increased in a little more than six years from £25 to £3B, or by 52 per cent. Police: Tenders had since 1947 been submitted by the federation, and in isolated cases by non-members. Members did not tender individually. In Auck-

land and Gisborne, the only districts where non-members submitted a complete tender for the last contract, the non-members’ prices were no higher than under the old 1947 association contract and in some cases lower, whereas the associations’ new tender prices were not lower than the old prices and in several cases much higher. Mental Hospitals: Tenders had been submitted by the associations and in isolated cases by non-members. Members did not tender individually. Prices in the only three tenders received from non-members for the last contracts were lower than the prices in the respective tenders from the various associations.

Charitable Aid: Generally tenders had been submitted by the associations in all cases. Apart

from those areas where only one funeral director operated, members did not tender individually. Northland Hospital Board figures showed an increase in association tender prices for an adult funeral from £l6 10s" in 1950 to £3O in 1958, an increase of nearly 82 per cent. The association tender to the Auckland Hospital Board exceeded that in the only tender by a non-member by about 90 per cent. North Canterbury Hospital Board figures showed an increase from £l9 10s in 1956 to £33 in 1959, an increase of more than 69 per cent. Private Funerals: There was evidence that members based their charges on tender prices arranged in the other categories or on the minimum price in the federation resolution of February, 1958. Tender prices in the various categories had increased steadily, and the federation’s minimum price for an adult (non-contract) funeral had increased from £23, plus disbursements, in 1950, to £39, plus disbursements, in 1958, an increase of a little less than 70 per cent. Mr Wise said he had formed the opinion that the effect of the federation negotiating contracts for funeral, burial, and allied services with Government departments and the practice of associations tendering on behalf of their members while the members refrained from submitting tenders individually was, or would be, to prevent or unreasonably reduce or limit competition. It was also his opinion that the practice of resolving upon a minimum charge for adult noncontract funerals, and of adopting prices tendered for Government and hospital' board contracts as a basis for minimum charges for adult non-contract funerals, was, or would be, to prevent or unreasonably reduce or limit competition. Counsel’s Views Mr Orr said that ring tendering had been carried out to its furthest extreme. . Usually in ring tendering individuals were permitted to tender at a previously agreed price, but in the refined form used by the federation not only was the tender figure agreed, but no member was permitted to tender individually. The only tender submitted, therefore, was that of the association, which then rotated the work among its members. For most of the- country the federation completely controlled the situation.

Association figures, Mr Orr said, were not based on actual costs or on any kind of average of costs., Mr Leicester said he did not know of any section of the community more law-abiding or adopting higher commercial standards.

Contract funerals were only a small proportion of the federation’s work. It could not be fairly claimed that increases

made by the federation were out of line with increases made for services performed in other directions.

It was impossible for the federation to lay down a set price for a funeral, every family having its own requirements. . One director did not know what another would charge for a funeral. There never had been, and it was not likely there ever would be, a set price for funerals, but if there was any doubt about it the federation preferred to accept the order rather•than argue about it. Mr Leicester said the federation had not breached the act, but it was prepared to accept the order and abandon any suggestion of a recommended minimum price, which had been only a guide. But it must remain open to directors to charge for a fair margin of profit.