Need to know
- The two biggest funeral providers in Australia are ASX-listed companies that account for a third of the entire market
- Funeral homes charge high prices with incomplete cost breakdowns, extreme markups on coffins, and opaque “professional services” costing thousands of dollars
- Quotes for the cheapest option, a direct cremation with no service, ranged in cost from $2400 to $5600 in our mystery shop of funeral homes
The first part of our funerals series reveals how decades of outsourcing what happens after a death to for-profit businesses – which are promoted as our protectors and built into the grieving process accordingly – has instead left mourners vulnerable.
In this instalment, we investigate how that vulnerability can be exploited by an industry that dictates how we say farewell to our loved ones, and builds its profits on massive markups and a lack of price transparency.
After almost 20 years of experience working with the dead, Marie* was a seasoned funeral arranger and embalmer when, in 2017, her grandmother died.
A colleague in the industry offered her a coffin at no cost, and she called the company arranging her grandmother's funeral to let them know.
Because funeral directors put a high markup on coffins, some will charge a fee if you bring your own instead of buying one from them.
But Marie says she received a terse email reply, saying – no, they wouldn't allow her to bring her own.
So, the family bought a coffin from the funeral home for more than $1000.
Her father and uncle, who visited the funeral parlour to make the arrangements, were told they had to have a celebrant (someone to officiate and oversee the funeral proceedings) despite their wish to go without. This added $550 to the bill.
Marie was told she couldn’t provide a coffin for her grandmother’s funeral.
"We ended up with all the bells and whistles that we didn't want," says Marie.
"With my background and my knowledge… I still couldn't get what I wanted, and it was extremely disappointing to think: wow, if that can happen to me, that can happen to anyone."
The soundtrack the family wanted was also rebuffed as inappropriate. Marie insisted and they got their way.
But there was another aspect of the funeral she couldn't control.
Dropping off clothes at the funeral home for her grandmother to be dressed in, she asked a staff member when the embalmer would be preparing the body.
She was told their embalmer was away on holiday. Then, Marie says, "she looked me in the eye and said: 'You're an embalmer. You do it.'''
We ended up with all the bells and whistles that we didn't wantMarie*, funeral worker
Marie wanted to use another funeral parlour, but because the details of the funeral had gone out in a newspaper notice, her family worried people would miss the event if they switched.
"I've never, ever wanted to embalm my own relatives," she says.
"I wanted to step back from my professional role and be a granddaughter, and they put me in a position where I was forced to do it.
"I'm still, to this day, angry. It made me completely ashamed of my industry."
But she also feels protective of it: "There are a lot of people in my industry who… we put in our heart and soul."
Then there are the people in the business who, she believes, "have forgotten that they need to show compassion… people who are just doing their job: tick a box, fill out a form, next."
"And that's what I think I encountered."
For this article we surveyed 548 people who'd recently organised a funeral. Like Marie, some felt their funeral home didn't allow them much choice.
One wrote that their family wished to arrange most of the funeral themselves but the funeral parlour tried to take over, including the choice of music, and said the cardboard coffin the family wanted was unacceptable.
Another respondent says they initially went with a larger funeral provider and discovered its resources – such as vehicles – were shared among different branches, so the family had to fit with the company's schedule.
They chose instead to go with a local, small business that had its own vehicles and roots in the community, which, they wrote, "offered an extraordinarily wide range of venues".
"I felt more comfortable with them… they certainly felt less business-like and much more personal," the respondent added.
These experiences point to a phenomenon foreseen by Glennys Howarth in Death and Dying in Australia (2000), edited by Allan Kellehear.
Howarth, who's written extensively on the subject, identified the trend towards market domination by larger funeral providers taking over smaller ones – a trend that accelerated in Australia after the arrival of US multinationals such as Service Corporation International (SCI) in the 1990s.
She thought this trend could result in companies resisting people's individual preferences in favour of giving them more standardised funerals, which would in turn "become less personal, less culturally distinct". This could, she wrote, lead to the "McDonaldisation" of funerals.
Funerals become big business in Australia
In the early 2000s, SCI Australia morphed into InvoCare and was listed on Australia's stock exchange.
InvoCare is the Asia-Pacific's largest provider of funeral products and owns the national chains White Lady Funerals and Simplicity Funerals, as well as chains in most states, including Guardian Funerals in NSW, Le Pine in Victoria, and George Hartnett Funerals in Queensland.
Together, InvoCare and Propel account for a third of the Australian funeral market
It currently enjoys a third of the metropolitan market and has its sights set on expanding to 40% over the next 10 years, as well as increasing its presence in regional areas.
Along with Australia's second-largest funeral company, Propel Funeral Partners, InvoCare's appetite for other funeral businesses shows no sign of abating, and concentration of the industry is increasing.
Both companies have also been buying cemeteries and crematoriums, traditionally the domain of councils and nonprofit trusts.
Together, InvoCare and Propel account for a third of the Australian funeral market.
As well as 16 cemeteries and crematoriums, a prepaid funeral plan division and a coffin business, InvoCare owns almost 300 funeral home branches in Australia.
Among these are outfits such as Archer & Sons Funeral Homes in WA, and Lester & Son Funeral Directors in Victoria – once family-owned small businesses that have changed ownership but retained their names.
They also retain the family feel of their businesses through pages of their websites dedicated to past owners – while neglecting to mention the multinational powerhouse is now in charge.
InvoCare's Hasting District Funeral & Cremation Service incorrectly states on its website that it's "an independent family funeral director".
InvoCare owns almost 300 funeral home branches in Australia.
The acquisition of a local funeral home caught Brian's* family off guard when his grandmother died in 2018.
For decades, he says, his family had used a small family-owned funeral parlour on Queensland's Sunshine Coast called Drysdale Funerals, which had "provided flexible pricing to accommodate families such as mine who were not overly religious and not overly wealthy".
After his grandmother's death, the family discovered that while the name remained the same, the funeral home had changed hands – to InvoCare.
Brian says his family didn't want extras such as clergy or a celebrant, live music or audio equipment, but they did want a projector to display family photos as they mourned.
We couldn't justify paying thousands of dollars for a projector, so we went without any photosBrian*, Qld
To get a projector, he says they were required to buy a package that included one, and each of these packages carried a price tag in the thousands.
"In the end, we couldn't justify paying thousands of dollars for a projector, so we went without any photos," says Brian.
"This caused significant amounts of distress… especially [for] my mother."
Propel Funeral Partners
InvoCare isn't the only ASX-listed behemoth to capitalise on the family branding of its acquisitions.
Propel Funeral Partners operates 102 funeral service locations in Australia and 18 in New Zealand, including 28 cremation facilities and 9 cemeteries.
One of them, Perth's Seasons Funerals, stated on its website: "Seasons is very much a family affair – which is just one of the reasons that we consider 'familyness' to be a core value."
A line about the founder, Steve Erceg, was followed by: "With all four of Steve's daughters working at Seasons, it's very much a family business!"
The funeral home reworded the website's text and disclosed that it's a part of Propel Funeral Partners after this article was published.
Propel also bought two of four Newhaven Funerals branches in Queensland in July 2018, and continued to use the same website, even though it stated that "Newhaven Funerals is a family-owned Queensland business".
It suggests a reliance on consumers' unfamiliarity with the funeral industry to gain advantage
Newhaven Funerals changed the wording after we asked them about it recently, but kept the words: "The Connolly Family since 1979".
Fraser Henderson, Propel's head of mergers and acquisitions, says the phrase is "factually correct" because the Connolly family had indeed provided funerals since 1979.
But it could also give the impression the family owns all branches listed on its website, and suggests a reliance on consumers' unfamiliarity with the funeral industry to gain advantage – a tactic that comes up time and time again in our investigation.
Most people have no idea about funeral options outside of what's suggested by a funeral parlour.
A major area of uncertainty is pricing:
- almost half our survey participants had no idea how much a funeral should cost when they had to organise one
- two-thirds didn't think to negotiate on price
- one in five didn't believe they had options to reduce costs.
Two-thirds of survey respondents didn't think to negotiate on price
An information booklet for the bereaved, provided by a NSW health district as part of a series produced for hospitals and other organisations throughout Australia, says funerals "can range from $7000 to $10,000".
It neglects to mention that, in most cases, you don't need a funeral director to arrange a funeral ceremony at all, which can bring down the cost of an essential services package to as little as $1200.
Given that most people in Australia die in hospitals or nursing homes, the information they put out is critical to the way most people experience the final farewell of their loved ones.
Personal recommendations, including from nursing home and hospital staff, were one of the most common ways (37%) our survey participants would choose a funeral home.
But these institutions typically advise people to use a funeral director – and don't give information about alternatives to using a funeral director.
Genuine choice means knowing about all the options
Almost half our survey respondents wanted funeral services that aligned with their values or those of the person who'd died, but genuine choice means knowing about all the options.
Our ability to choose is hindered when one of the primary purposes of the funeral industry's biggest players is to pursue profits for shareholders.
Stock exchange-listed companies that provide death care to the grieving are tapping into a vast business opportunity – annual industry revenue has now reached $1.6 billion.
InvoCare has made an average profit of $63.8 million every year over the past five years.
An IBISWorld report on the sector found that, due to the limited time people feel they have to arrange a funeral, along with the fact that most funerals are paid for through the deceased's estate, profit margins are generally robust, at almost 20%.
Annual industry revenue has now reached $1.6 billion
While the funeral industry rakes it in, the report claims that "higher prices for burial plots and greater wage costs have mostly been passed on to customers over the past five years".
Perhaps it's no surprise, then, that 28% of our survey respondents found funerals more expensive than they'd expected. The proportion was even larger (36%) for people arranging a funeral for the first time.
28% of our survey respondents found funerals more expensive than they'd expected
In an emailed statement to CHOICE, InvoCare's chief operating officer Damien MacRae says the company's research shows customers are "looking for value from a funeral that is not just focused on price, but also a higher level of service and facilities.This is why we are investing $200 million in our people and facilities."
"The vast majority of our customers feel the price paid was what they expected, the service they received met or exceeded their expectations, and they would recommend our services to friends and family."
We shopped 10 White Lady Funerals, 10 Simplicity Funerals, 4 Propel Funeral Partners and 12 independent funeral homes.
To find out what the going rate for a funeral is these days, we contacted funeral homes in half a dozen metropolitan areas across Australia: Sydney, Perth, Melbourne, Brisbane, the Gold Coast and Hobart.
What we asked the funeral homes:
- What funeral options are available to the family? We explained that we were unsure of the budget at this point
- Could they tell us about the most basic burial service and the most basic crematorium service, and give us an all inclusive price?
- What can be done to reduce the costs of the funeral?
- Could they email us a brochure or price list detailing all the options that are available?
The calls made to 36 funeral homes were mostly pleasant interactions – which align with our survey results, in which 95% of respondents reported compassionate and professional staff who were responsive to their wishes.
But the information these businesses gave often wasn't clear, ranging from poor cost breakdowns to outright misinformation.
The wide-ranging cost of direct cremation
In our mystery shop, quotes for direct cremation ranged from $2400 to $5600.
Because the potential add-ons are endless – businesses in the mystery shop offered dove and butterfly release, personalised sunflower seeds and "mourning stationery" – here we'll compare costs for the cheapest package you can get: direct cremation without a funeral.
For what's essentially the same set of goods and services – transporting and storing the body, filling out paperwork, liaising with the crematorium, and providing a coffin – the price variation is startling.
- The cheapest quote, $2400, was from an independent business (not owned by InvoCare or Propel).
- Quotes from independent businesses ranged from $2400 to $4000.
- Simplicity funeral homes ranged from $3000 to $3900.
- No Propel funeral homes provided a written quote for direct cremation.
- One White Lady branch provided a written quote for direct cremation, and it was the priciest, at $5600.
Difficulty of getting a quote
About half of our mystery shoppers reported difficulty getting pricing information from a funeral parlour over the phone, especially when it came to basic options or cost reduction.
Many found the information they were given unclear, with a few being encouraged to meet face to face if they wanted more details.
For some, emailed quotes made the costs easier to understand – although getting a breakdown of costs was another story (see below).
Some funeral homes got back to us with quotes within 48 hours, others had to be chased, while some never supplied a written quote at all.
- 14 funeral directors didn't provide written (emailed) quotes within 48 hours, and 9 of them didn't get back to us with a quote at all.
- 24 of the 36 funeral homes we contacted said they offered direct cremation when asked, but only 11 gave written quotes for the option.
- Simplicity Funerals were the most likely to offer quotes for no-service cremation, with 6 out of 10 branches eventually sending quotes (one only did so after a second prompt from the shopper).
Difficulty of getting a cost breakdown
Given that the bundling of various goods and services has made it more and more difficult to compare quotes across funeral homes (different packages have different inclusions), knowing the precise cost of each item is critical for price transparency. But it's very difficult to get funeral homes to itemise their quotes.
- 10 homes provided only lump sums with no cost breakdown, other than (in some cases) a couple of small expenses such as flowers.
- 17 funeral homes – less than half the total we contacted – emailed quotes with varying levels of cost itemisation.
- The independent businesses weren't, as a group, any better at specifying where your money would go, with 5 of the 12 providing no breakdown at all.
- None of the Simplicity funeral homes' quotes for cremation had cost breakdowns, with prices listed only for flowers ($100–275) and, for some branches, the celebrant fee ($330–385) for packages including a funeral service. Such costs are small change in the context of their total package costs, which range from $4000 to a whopping $7850.
- Four of the Simplicity funeral homes' quotes for burial itemised the costs, but stopped short of breaking down the professional services fee.
- Six White Lady Funerals branches sent us the most comprehensive quotes of the bunch – but again, items were lumped together, usually under the professional service fee.
- One White Lady funeral home was the only business that emailed a cost breakdown for direct cremation.
A White Lady funeral home was the only business that emailed a cost breakdown for direct cremation.
More than half the total cost of the White Lady quote for direct cremation is a professional service fee ($2900), and a third ($1800) is for the coffin.
Let's take a closer look at these big money-earning items for funeral homes.
The mysteriously high price of 'professional services'
'Professional services' make up the biggest chunk of a funeral home's earnings – and they charge their clients thousands of dollars for them.
This is despite the fact that you don't need to take a course or get a certificate to become a funeral director (although in WA you need a licence to operate).
So what do 'professional services' fees include?
Funeral businesses that itemise their quotes usually list staff, paperwork, event management and use of their facilities under the professional services umbrella, as well as transport and mortuary care, though this is sometimes a separate cost.
The 'obscene' cost of coffins
The coffin is the product with the greatest markup, according to members of the industry.
Laws in each state and territory require the dead to be cremated or buried in a coffin, except in cases where permission is granted from a government official.
Industry insiders say funeral businesses routinely sell coffins for anything between two and ten times what they pay a wholesaler.
Many respondents complained of a lack of coffin options and the fact that the cheapest was still expensive
"If I buy an enviro coffin, which costs $150 at the wholesaler, then that is what I charge," says death doula and funeral planner Lola Rus-Hartland.
"I don't charge the $950 that's the minimum charge at the funeral director's… I just find that obscene."
It's a sentiment shared by many respondents to our funeral survey, who complained of a lack of coffin options and the fact that the cheapest on offer was still expensive, especially given it would be incinerated or buried in a hole.
"Our relative's funeral service supplier made it quite difficult to use an outside supplier," wrote one. "To avoid raising stress levels we succumbed to using theirs, costing an extra $2000."
Cash for custody of the body
Mortuary care forms a part of most quotes – and it's often lumped in with transport costs, priced together at up to $2200.
- Until they were specifically asked, none of the funeral homes mentioned the option of keeping a body at home – not even when our shoppers asked about options for spending time with a loved one's body before the funeral.
- 13 funeral parlours said 'yes' when asked if it was possible to keep the body at home.
- Only three funeral homes said keeping the body at home would reduce costs.
- 6 out of 10 White Lady Funerals branches said it wasn't possible to keep the body at home, claiming people's homes lacked the facilities to store a body.
White Lady Funerals' parent company, InvoCare, says its brands "do not have a policy against storing bodies at home", but added: "We do however need to ensure the family is aware of the legal and public health requirements of transporting and storing a body. These are complex and vary from state to state."
In most cases it's legal to keep the body at home, and experts on bereavement say doing so can be beneficial to people who are grieving.
However, some participants in our survey had wanted to spend time with loved ones after they died, but missed the chance due to a lack of knowledge.
"It would have been nice to have a place where we could sit privately and be close to her as mum's body was cremated," one respondent wrote. "I didn't think to ask until later in the process."
I didn't realise I could have brought my daughter home for a short period ... and now deeply regret not doing soSurvey respondent
Another said: "I didn't realise I could have brought my daughter home for a short period of time. I wasn't told of this option and now deeply regret not doing so."
Instead of laying out the possibilities, funeral directors in the mystery shop encouraged an onsite viewing at the funeral home.
But once the body of a loved one is in the custody of a funeral parlour, they have control over when you can see them, for how long – and at what cost.
We saw unexpected price differences for services like body viewings, with one provider charging $110 for people to view their loved ones, and another charging $1600.
But even if you want to view the body, there may be restrictions. For example, in the terms and conditions at the bottom of some quotes from InvoCare's homes:
"Day and time of the service and viewing is at the discretion of [Simplicity Funerals/White Lady Funerals] and is subject to availability. A viewing may be included at an additional charge."
And if you want to dress the body yourself, you'll have to pay a dressing fee.
The challenge of getting a no-frills farewell
The experience of our mystery shoppers was not a world away from that of our survey respondents who'd paid a funeral home to arrange a cremation only. (Several said this allowed them to organise a more personal memorial themselves.)
Survey respondents also reported a range of prices. Although the cheapest cremation cost less than $2000, one respondent paid $8000. The respondent says they emailed a Sydney crematorium to ask for the cost of a cremation and was told it would be about $2000.
They were told they needed a funeral director to arrange a cremation
After their mother died a month later, they visited the crematorium and was told they had to go to the nearby funeral home – owned by the same company – because they needed a funeral director to arrange a cremation.
But you don't legally have to use a funeral director for this, and under the NSW Public Health Regulation 2012, a cremation authority must not, without reasonable excuse, refuse to accept a body for cremation.
The survey respondent says that the funeral home charged $8000 for transporting the body from a hospital 13km away, the cremation, the cheapest coffin, a newspaper announcement and the required forms.
Convenient – but at what cost?
Many survey participants weren't convinced that funeral directors offered value for money, with one writing that the goods and services they arranged "cost way more than you could reasonably expect".
"Remember, they are not grief counsellors, they are salespeople," they wrote.
As InvoCare put it in a presentation for its 2018 annual general meeting, the company has "traditionally grown revenue per case by increases on products such as coffins, flowers etc.".
They are not grief counsellors, they are salespeopleSurvey respondent
Another respondent said funeral costs add to the stress of losing a loved one: "Dying should not be so expensive."
Some survey participants were happy with the service they got, despite the high cost. One respondent, who said they didn't think to shop around, wrote: "The price was staggering. However, I was really impressed by White Lady. Everything went very smoothly."
Another had "nothing but praise" for their funeral director, adding: "But you pay for it… lots!"
Over the decades, governments and regulators have shone a spotlight on an industry that consumers have accused of providing overpriced, unnecessary products, quoting a wide range of prices for the same service, and causing confusion.
The results of our mystery shop and survey show not much has changed – despite the introduction of regulations by the NSW and Victorian governments that require funeral businesses to disclose and itemise their costs.
In Victoria, a funeral home must give a clear price list of all the funeral goods and services it provides – including those for a basic funeral option – to anyone who asks.
The recently updated NSW Fair Trading Regulation 2019 goes a step further, requiring funeral providers to clearly display the price of each of their goods and services, as well as their cheapest package, at their operating locations and on their websites.
Funeral homes also have to give a cost-itemised quote, in writing, to a consumer before entering an agreement to carry out their funeral services.
The industry has been given a deadline of 1 February 2020 to adopt the new requirements.
CHOICE pushes for reform
In a submission to the NSW Department of Customer Service, we recommended that funeral directors be required to provide prices for specific items, including those currently lumped together in the professional service fee, to help consumers understand and compare costs.
The department adopted our suggestions that costs for care and preparation of the body are separated from the cost of transporting the body. It also introduced, on our recommendation, clear pricing on a greater range of options including shrouds and the hire of a refrigeration plate.
We also recommended the department monitors compliance with the new regulations, as our investigation shows that the industry regularly flouts existing price transparency laws while generating huge profits.
Increasingly, companies are also using another avenue to make money: offering the option to pay for a funeral ahead of time. In part 3 of our investigation, we look at the pitfalls of prepaid funerals.
*Some names have been changed.