The Australian Competition and Consumer Commission is considering granting approval to a pre-paid funeral scheme run by Retirees WA, which would see competing funeral directors issue fixed price funerals at discounted rates to members.
RWA administers the scheme for aged, invalid and widowed pensioners in Western Australia, as well as certain superannuants, with members of the Western Australian Funeral Directors Association and other individual funeral directors involved.
ACCC chairman Graeme Samuel said that while the commission would normally be concerned with agreements between competitors to offer services at a common fixed price, market inquiries had shown the prices to be lower than the current market rate.
The ACCC can grant immunity from the application of the competition provisions of the Trade Practices Act 1974 if it is satisfied that the benefit to the public from the conduct outweighs any public detriment. The commission originally authorised these arrangements in October 2001.
"The ACCC considers that these arrangements allow participating funeral directors to provide basic funeral services to a section of the community, some of which are financially disadvantaged, at a lower price," he said.
"The ACCC also took account of the fact that the arrangements cover a very small segment of funerals in WA, that fund members can opt out of the scheme at any time should they be able to negotiate a better deal individually and that there will continue to be a high degree of non-price competition between funeral directors."
The ACCC will now seek further submissions from the applicant and interested parties in relation to this draft determination prior to making a final decision, which it expects to occur within around six weeks.
