Kossovics: Funeral Industry Cartel Case Will Have a Sequel

Latvia's Competition Council on 20 October published a decision on a cartel in the funeral industry, finding that several companies had secretly coordinated their actions in public procurement. The companies were fined more than 47,000 euros in total. The case was discussed on the TV24 programme "Preses klubs" by Martins Kossovics, a Riga City Council member, deputy head of the Progressives faction and a businessman.

What the Competition Council found

The investigation initially examined nine companies: ABSocial, FLAMMAX, Rigas memorialais centrs, Fungi International, RR Company, Krematoriju apvieniba, Terrawood, Sanitarais Transports and Nacionalais Apbedisanas Dienests.

The council concluded that some of the companies exchanged commercially sensitive information, coordinated their bids and agreed on participation terms. In some cases they also agreed on who would win a tender.

Bids showed matches in documentation, details and contact persons, and even in the IP addresses from which they were submitted to the Electronic Procurement System. This indicated that in several cases competing bids had not been prepared independently.

The tenders examined were run by Riga City Council bodies, Riga East Clinical University Hospital, state social care centres and the State Police. The council also analysed procurement of funeral services and specialised vehicles.

"Tenders organised by public persons" does not refer to funerals of well-known people. It means procurement run by the state, municipalities and other public institutions.

Kossovics's view

Kossovics said he was particularly intrigued by the information about collusion in public procurement. He noted that the funeral business is a fairly closed sector about which the public knows little. In his view, the sector is mostly made up of small and medium-sized firms, and in a limited market agreements between them can arise.

"Most likely, some kind of mutual talks and agreements are taking place, which, as can now be seen, have very possibly resulted in violations," he said.

The councillor predicted the story would continue. He suggested that more detailed information on how the firms cooperated and which tenders were affected could reveal a side of the industry that has so far been little seen.