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Commission warns funeral directors on price fixing

Media Release


Issued 4 May 2004-05 / 125

Commission warns funeral directors against price fixing

The Commerce Commission has issued separate warnings to six Manawatu-based funeral directors. The funeral directors submitted a joint tender to the police for a contract to transfer deceased persons that put them at risk of breaching the price fixing provisions of the Commerce Act.

The Commission’s investigation established that the six funeral directors agreed prices for the supply of services as part of a joint tender put forward to the New Zealand Police in 2003. The tender related to a contract to transfer deceased persons for the Central Police District, which includes the Manawatu region.

“There is clear evidence that the funeral directors met and discussed the submission of a joint tender for the 2003 Police Contract,” said Commission Chair Paula Rebstock.

“The funeral directors agreed prices and the manner in which the joint tender documentation would be completed, collated and delivered.”

“The Commerce Act specifically prohibits price fixing. Price fixing is deemed to substantially lessen competition in a market and can have destructive effects on economic efficiency.”

The six funeral directors, members of the Funeral Directors Association of New Zealand, are
Beauchamp Funeral Home Ltd;
Thomas Griggs & Son (at the time owned by Bledisloe New Zealand Ltd);
Robert J Cotton & Sons Ltd;
Anderson Funeral Services Ltd;
Harvey-Bowler Funeral Services Ltd; and
Tararua Funeral Services Ltd.

While the joint tender by the six funeral directors was unsuccessful, Ms Rebstock said that if the tender had been successful, it would have resulted in competitive detriment and the Commission would have considered taking court proceedings.

The Commission has also formally advised the Funeral Directors Association of New Zealand and New Zealand Police of its concerns in relation to this matter, to ensure that funeral directors in other areas do not put themselves at risk of contravening the Act in the future.

ENDS

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