The high cost of death care: the players owning grave space, and the prices they can charge

This is part four of Preying on Grief, Crikey’s four-part investigation of the funeral industry. Read part three here.

With space running out in metropolitan cemeteries across Australia, there’s a growing concern around who owns the remaining grave space — and what they’ll be able to charge once they own the only remaining plots.

The two biggest funeral providers in Australia are ASX-listed companies which account for one-third of the entire market, and the lack of competition could mean consumers are priced out of funerals or forced to pay for services they don’t want or need.

In NSW, there’s a growing stoush about who should run the state’s cemeteries — and whether religious organisations currently at the helm are up to the task.

The big players 

The largest player in the funeral game is InvoCare, which owns Le Pine, White Lady and Simplicity funerals, and makes up 25.6% of Australia’s market. In 2018, it made eight separate acquisitions of funeral businesses. It’s also the leading provider of pet cremation services.  

In March, the Australian Competition and Consumer Commission (ACCC) fined two funeral businesses for making false and misleading “local ownership” representations, when in fact they were owned by Propel Funeral Partners — a conglomerate that makes up 5.9% of the market. 

As Crikey previously covered, many consumers aren’t aware of their obligations when it comes to arranging funerals, and risk being upsold expensive packages.

In Sydney, InvoCare owns most remaining burial plots, followed by the Catholic Metropolitan Cemetery Trust (CMCT), which operates cemeteries on state-owned land. Five trusts that operate state-owned cemeteries in Sydney oversee 72% of burials but have just 24% of the remaining burial plots. 

Dr Hannah Gould of Melbourne University’s DeathTech Research Team tells Crikey this was a massive concern. 

“It’s not just that that single company owns the majority of the available graves, but it also owns the majority of funeral homes, funeral directors and crematoriums,” she said. 

“So there wouldn’t be any choice at some point for consumers.” 

Cemeteries up for sale

Because of NSW’s mismatched system, with cemeteries run by a mix of public, private, church and charity bodies — instead of being vertically integrated with the state, as is the case in SA and Victoria — there are huge price differences in burials. It can cost three times as much to bury a person in one part of the state compared to another. 

This a massive concern to the NSW government: an Independent ­Pricing and Regulatory Tribunal NSW report found crown operators are spending an average 23% more on running ­cemeteries than they need to — leading to higher burial costs for families.

While many operators haven’t been purchasing new land, both to address demand and cover costs of maintaining existing graves, others like the CMCT have faced barriers when trying to. Getting a new Campbelltown cemetery approved has taken eight years due to opposition from residents and local councils.

This year, following a review into the sector by the NSW government plans, were made to combine the five Sydney trusts into one state organisation, OneCrown, to oversee the cemeteries. The report found by 2038 OneCrown could have generated excess capital of approximately $600 million and eventually develop into a multi-billion dollar asset for the state.

But the plans were met with outrage by existing operators and scrapped. Religious leaders feared the state wouldn’t be able to adhere to religious traditions, and with the CMCT launched legal proceedings against the plan, calling it an “attack on religion”. A new solution has yet to be proposed. 

Powerful grave owners

CMCT is one of the few NSW operators with space to spare. It has approximately 100,000 available plots in Sydney, with the new Campbelltown cemetery underway and plans to buy land in Wallacia, a semi-rural suburb about 70 kilometres west of the CBD.

It has also doing well financially: in the last year, the charity had an income of $31.2 million, making $17.3 million in profit. It has assets of $167 million. 

CMCT, like the private funeral providers that purchase plots from it, is powerful and has held tightly to the keys of its cemeteries, with the support of Catholic Archbishop ­Anthony Fisher. When a controversial plan to privatise cemeteries was floated in 2017, Fisher was accused of ruling over the trust, requesting board members to be appointed and allegedly rebuffing unanimous board recommendations.

Then-chairman of the Catholic Cemeteries Board and former House of Representatives speaker Leo McLeay quit, citing “interference” by Fisher in management of the company. The plan was scrapped amid protests from within CMCT and other NSW cemetery trusts. 

Other funeral advisers from religious groups Crikey spoke to were happy with the current arrangement. CMCT reserves space in existing and proposed cemeteries for different faiths, says funeral services director and adviser Mariam Ardati.

“We have a long history of putting forth our concerns and being able to have our needs met when it comes to the particular burial traditions and customs that we have,” she told Crikey.

Barrister and former president of the NSW Jewish Board of Deputies David Knoll tells Crikey the community is concerned that if the state takes over, prices could increase further and faith requirements may not be met. Jewish burials, for example, are not run by commercial operators, but by a non-profit communal body.

“The bulk of burials in NSW are faith-based, and we’ve asked the government to show how they’re going to meet our needs,” he said.

“Whereas the Catholic proposal incorporates our religious requirements directly.”

There’s a lot of money in the death industry, and not a lot of oversight — or solutions. Limited regulation, price transparency and competition is a massive cause for concern, with many grieving consumers unaware of their options.

The ACCC will release a report based on a wide-ranging survey into competition and consumer issues in the funeral services sector in the coming months.

A spokesperson for InvoCare told Crikey the company is committed to the delivery of quality, sensitive and transparent services to client families and the community, and abides by the codes of conduct of the Australian Funeral Directors Association and the Australasian Cemeteries and Crematoria Association. They said the company strongly supports regulatory measures.

CMCT did not respond to Crikey’s request for comment.