There's money in death

Death is a certainty for everyone, so it would follow that running a funeral business would have longevity and stability.  But consolidation by global giant Invocare, which has captured nearly half the market in Australia, is making it harder for smaller independents like Mannings Funerals in Sydney to turn a profit, according to Mannings celebrant Sal Scevola.

"It is because they own such a huge percentage of the market, it gets to the stage where they are the market, we are just the peripheral. What Mannings would do and other independents would do would account for 10 percent of the market. I have reason to believe that they probably have secured Australia wide anywhere up to 90 percent of the market," he said.

Since listing in 2003, Invocare has acquired an extra 200 businesses and has grown its share price ten-fold, but Invocare's Chief Operating Officer Greg Bisset refutes any claims it Is pushing out the independents.

"To make it clear, there are over 900 funeral operators in Australia, so when people say Invocare has a stranglehold on the market that is not quite true," he said.

Last year, Invocare made more than 400 million dollars, with a 25 percent profit margin, in part helped by owning infrastructure like crematoria, morgues and cemeteries.

Vertical integration is a business boon for the funeral giant the Australian Funeral Directors' Association, says is putting pressure on the smaller operators.

Dale Maroney is the owner of Walter Carter Funerals and is on the board of the AFDA, a voluntary industry regulator that counts 70 per cent of the industry among its members. Ms Maroney says the idea funeral directors "all drive Ferraris" is a myth.

"When you look at on average it's about 38 hours of labour per funeral to actually facilitate one and you look at the cost of a new hearse being about a quarter of a million dollars, clearly the margins aren't that enormous. There is staff and all the on costs associated with getting staff, so I would say it is becoming more difficult for independent players in the funeral industry in Australia," she said.

Rising land costs and population growth has become of key concern to the industry, and it's another, rising cost passed on to consumers.  It Is now not only expensive to live in Australian cities, it is expensive to die in them. The average plot starts at ten thousand dollars and Sydney inner city cemeteries are expected to run out of space by 2050.

Recently, the New South Wales government shortened the minimum lease on a grave site to 25 years - a move that is already in place at Waverly Cemetery in Sydney's eastern beaches - and it could be adopted by other states.

A third of the population choose to bury their dead at five times the cost, and many of them make that choice for religious reasons, and Mr Scevola says in burial and other instances, many are being penalised for their faith.

"Once you add up all those costs, it becomes on average probably  about five times more expensive than using a cremation."

"People like the Hindus for example. In their culture, it is important for the family to actually see the coffin of the deceased being actually burnt. So the crematoria now have special rooms in the back end where these families have access to watch this particular thing happen," he said.

Mannings Funeral co-owner John Manning says regulation has declined over the decades - and there are fears among industry practitioners that many operators are not caring properly for their clientele.

"When we first started the funeral industry was regulated, the mortuaries were registered and the council would come around to your mortuaries and sign off. Well I don't reckon we have seen that bloke from the council for the last 10 years," Mr Manning said. Mr Bisset says companies that are not industry accredited, can fall short of meeting compliance standards upheld by the majority of businesses.

"There are some operators who charge a lot less. But I think the consumer has to ask is; how are they able to afford to charge less? What is some of the corner cutting that perhaps could be going on?"

Mr Scevola says it is as much about compliance as respect, and families would be "horrified" if they saw how some workers' treat their deceased.

"If there is an excess of bodies, they are on the ground in a cool room sitting on the ground, bodies stacked on top of each other, we know this in the industry because we talk to one another, we know these things happen," he said.  Despite the challenges involved in remaining independent in a largely consolidated sector, Mr Scevola says Mannings funerals will not be bought by a bigger player.

"Like most bigger businesses that are trying to gobble up the smaller ones, they'll entice you, they will try to appease you, they will invite you out to meet with you or to have lunch or to discuss the possibilities. But with an outfit like Mannings there are no possibilities, this is a family run operation."

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