ACCC proposes to authorise agreements to set lower basic funeral prices for Western Australian pensioners

The Australian Competition and Consumer Commission has issued a draft determination proposing to authorise* agreements between the Australian Pensioners League of Western Australia, the Western Australian Funeral Directors Association and other individual funeral directors to supply fixed-price discount pre-paid funerals to members of the APL.

The proposal is for the provision of basic funeral services to Western Australian pensioners at a substantially discounted rate.

"The ACCC considers that the agreements will provide basic funeral services to many less well off people in the community. The current price set is around 60 per cent below the prevailing market price", ACCC Chairman, Professor Allan Fels, said today.

The APL funeral fund is a funeral pre-payment scheme available to aged, invalid, and widowed pensioners in Western Australia, as well as certain superannuants, for the purpose of allowing the elderly the benefit of prior planning of a burial or cremation, at a substantially reduced cost.

"The ACCC would generally be concerned with agreements between competitors to offer a service at a common fixed price. However, the ACCC has examined the APL's proposal and considers any potential anti-competitive detriment arising from the agreements is limited. The agreements aim to set prices to fund members which are significantly lower than would be otherwise generally available to them..

"The authorisation enables the WAFDA and individual funeral directors involved to provide many Western Australian pensioners with the option to make pre-payment for a basic funeral, which might otherwise be beyond their financial means.

"The ACCC, however, would be concerned if, at a future point in time the authorisation was used to allow a price to be set which was less favourable to fund members than would be the case if each individual funeral director determined its own price. If this was to occur the authorisation may be revoked. The ACCC requires that any contracts between the parties in relation to the authorisation arrangements be available to the ACCC on its request to ensure the ACCC can be well informed on the matter".

Background

*The ACCC has the function, through the authorisation process, of adjudicating on certain anti-competitive practices that would otherwise breach the Trade Practices Act. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers offsetting public benefits. Applications for authorisation are considered on a case by case basis. The onus is on the applicant to demonstrate that there is a public benefit arising from the conduct and that the public benefit outweighs any public detriment. In order to identify and measure the public benefits and detriments associated with the conduct, the ACCC compares the position which would, or would likely to exist in the future if authorisation were granted, with the position if the authorisation were not granted.