We are waiting with bated breath on the Competition and Markets Authority (CMA) decision as to whether it will conduct a market investigation reference (MIR), following the consultation on its funerals market study, published in November 2018. The smart money is on a MIR taking place and, at NAFD National Office, we are gearing ourselves up for this, and preparing our strategy.
There are a mixture of opportunities and threats for funeral directors that could arise from a MIR, and we need a strategy to ensure the opportunities are maximised and the threats put to bed. Here are my first thoughts for our strategy going forward:-
- Frustrate any attempt to introduce price regulation
When we met with the CMA in December, we left with the distinct impression that the possibility of price regulation was firmly in the CMA’s thoughts. However, the CMA could not give us any idea as to how this might work to the benefit of consumers. In most markets, the introduction of price caps tends to push prices up (prices cluster around the cap), competition and innovation is stifled and any squeeze on margins are more easily absorbed by larger corporates (witness the demise of small energy providers since price regulation was introduced).
It is worth remembering that it was not the CMA that pushed for price regulation in the energy market, but the Government. Therefore, it is not just the CMA we need to beware of in relation to price regulation, but the Government too. Price regulation is a headline grabber and vote winner. It is the easy option for any government that wants to look like it is doing something to tackle funeral poverty, while doing no such thing. We need to be on our guard.
I am currently in discussion with economists with expertise…
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