Dignity shares slide after regulator proposes funeral competition probe
Shares in listed-funeral provider Dignity dropped 15 per cent today following an announcement by the Competition and Markets Authority (CMA) of a potential probe of the sector.
The CMA today proposed a “major funerals probe after identifying serious concerns”.
Shares in Dignity fell 15 per cent, from 864p to 847p following the news.
The CMA began a market study of the sector six months ago, and said today that given the nature and significance of the issues it had uncovered, a full market investigation could be required.
It said its work indicated problems with the market that have led to above inflation price rises for well over a decade.
It said the scale of the price rises do not appear to be justified by cost increases or quality improvements.
The CMA said people spend between £3,000 and £5,000 organising a funeral with the price of the essential elements increasing two-thirds in the last 10 years, almost three times the rate of inflation.
Organising a funeral would now cost those on the lowest incomes nearly 40 per cent of their annual outgoings, more than they spend on food, clothing and energy combined.
Dignity said in a statement that it is “considering the recommendations in detail” and said it has “engaged constructively with the CMA since the market study was announced in June 2018 and strongly supports the opportunity to improve standards within the sector and meet the expectations of consumers.”
Dignity chief executive Mike McCollum said: “We look forward to our continued work with the CMA and other industry bodies to ensure we take the necessary steps to protect consumers and improve quality and standards across the industry.”