An article by ABC News Australia writer Carrington Clarke investigates the competition level of the business in Australia.  I read the article, which you can read here, and found it asked a lot of interesting questions that pertain to funeral service in North America also.

The crux of the article is that public company InvoCare Limited of Australia has gotten so big and controls about 1/3 of the industry in Australia.  The author also mentions that many consumers don’t realize that Invocare is so big because they operate behind about 40 different brands on the continent.

Chairman Rod Sims of the Australian Competition and Consumer Commission (ACCC) is concerned about competition in the funeral sector.  He did say, “The funeral sector is definitely one that’s on our radar.”

InvoCare, for their part, much like Service Corporation International in North America states that “we actually compete at a local level, so for instance, somebody on the North Shore of Sydney isn’t going to a funeral director in Sutherland, so we are always competing with the guy down the road.”

Some interesting items in the article include:

• One of the benefits of InvoCare is it actually has multiple brands, so the market may be unaware they are dealing with the same company
• Funerals are generally events that happen quite infrequently, and therefore price discovery is a little harder in the market place.
• Australia’s population base, in itself, is expected to drive the growth in the industry
• One of the benefits for the funeral service industry is that they’ve had volume growth for a very long period of time
• Smaller community and lower-cost religious groups like the Salvation Army have entered the market claiming that they offer more choices and control.  (You can read an article that Funeral Director Daily did on this issue here)

Funeral Director Daily take:  The basis of this article is about competition and the idea that InvoCare has multiple brands in Australia and consumers, when calling the different brands, don’t know they are calling funeral homes owned by the same company.  That is no different than in North America where regional and national consolidators continue to use the historic brand name of funeral homes they acquire.

Sometimes, in North America, consumers call two or three different funeral homes, all with different brand names, in a metropolitan area not knowing that they are owned by the same company.  Matter of fact, some companies actually turn down direct cremation, telling consumers to call someone who caters to that business and then give the consumer the number of their very own direct cremation company – under a different brand – without telling them there is a mutual ownership.

This is a fairly common business practice, but are there ethics in the transaction that need to be taken into consideration?  I’ve often thought – for firms that do this, why don’t they just tell the consumer that they own a direct cremation business where they can help the consumer save money?  They called you first. . . they must think positive of your brand. . . why would they be against using another business of yours that caters to the type of service that they are choosing?

Finally, the bullet points up above — while in this article about Australian funeral homes- could certainly be asked about North American funeral homes as well.  The industry is evolving. . . but it seems to be evolving everywhere.

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