The Western Australian Funeral Directors Association and other individual funeral directors will be able to supply fixed-price discount pre-paid funerals to members of the Australian Pensioners' League following a decision by the ACCC to grant immunity to the agreements from action under the Trade Practices Act 1974*.
"The ACCC decision allows participating funeral directors to provide basic funeral services to many Western Australian pensioners at a substantially discounted rate", Acting ACCC Chairman, Mr Rod Shogren, said today. "The current price set by the agreements is around 40 per cent below the prevailing market price.
"This means that many APL members will be able to purchase funeral services that might otherwise be beyond their means.
"The ACCC would usually be concerned with agreements between competitors to offer a service at a common fixed price, but in this case the agreements set prices that are much lower than would otherwise by available to fund members.
"If the prices set by the agreements between the APL and funeral directors were higher than the prevailing market price the ACCC would have had concerns about the arrangements and it is unlikely that immunity would have been granted. So that the ACCC can ensure that the immunity granted by its decision is not used to set higher prices to funeral fund members, it is a condition of authorisation that any contracts between the parties in relation to these arrangements be available to the ACCC on its request".
This decision confirms a draft decision made by the ACCC in relation to this matter in September of this year. The ACCC has granted authorisation for five years.
*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.
** See media release, ACCC Proposes to Authorise Agreements to Set Lower Basic Funeral Prices for Western Australian Pensioners, MR220/01 12 September 2001.