Latvia's consumer watchdog, the Competition Council (Konkurences padome/KP) said on October 20th it had uncovered a cartel operating even in a sector in which customers are already guaranteed: burials.
On October 1st, the KP adopted a decision establishing that a prohibited agreement existed between nine companies involved in the undertaking business: SIA “ABSocial” and SIA “Rīgas memoriālais centrs”, SIA “FLAMMAX”, SIA “KREMATORIJU APVIENĪBA”, SIA “RR Company”, SIA “Terrawood”, SIA “Sanitārais Transports” and the somewhat worryingly named SIA “Fungi International”.
Another company, SIA “Nacionālais Apbedīšanas Dienests” was also included in the violation, but the company itself departed this mortal coil in 2024, therefore no post-mortem case was pursued against it.
"The KP found that the actions of the Participants in the Case were aimed at the division of procurements, agreeing on participation or non-participation in at least 13 public procurements for the provision of funeral services or the transportation of the deceased by specialized road transport. The CP found that the companies exchanged commercially sensitive information, submitted cover bids and unreasonably withdrew bids," the KP said.
The procurements were organized by Riga Eastern Clinical University Hospital, state social care centers, Riga Municipality, and even the State Police during the period from 2020 to 2025. Their total estimated contract amount reached approximately 2 million euros, including procurements that were later suspended or terminated.
The KP has imposed fines totalling 47,124.66 euros. The fines were set at 2% to 4.5% of the net turnover of the violators in the last financial year, taking into account their respective roles in the cartel.
"We have identified competition problems in the funeral services sector before – both through market monitoring and through the implementation of preventive measures. However, evidence has now been obtained that companies have systematically divided the public procurements identified in the case, exchanged commercially sensitive information, and withdrawn and submitted cover bids, imitating and creating apparent competition. However, this is not the only challenge in the sector. We are still receiving signals about other problems in the sector, which are partly facilitated by the disorderly legal environment. Already in 2015, the Competition Commission pointed out the need to develop a unified regulatory framework for the sector, but more than ten years later this issue has still not been resolved,” said the Chairperson of the Competition Commission Ieva Šmite.
The KP found that the prohibited agreements were not implemented between all participants in the case simultaneously and did not apply to all procurements. In individual procurements, mutually coordinated actions were implemented by different groups of companies.
"Although the composition of the companies in the specific procurements differed, the same companies repeatedly participated in the infringement," said the KP. "In order to achieve a previously agreed outcome of the procurements, the companies mutually agreed on participation or non-participation in the procurements, exchanged commercially sensitive information, including on the prices of the offers, and in some cases prepared and submitted offers on behalf of competitors."
According to the KP, its investigations exhumed the fact that one shadowy figure was responsible for coordinating the cadaverous cartel:
"The initiator of the aforementioned prohibited agreement was a representative of SIA “KREMATORIJU APVIENĪBA” and SIA “Nacionālais Apbedīšanas Dienests”, a natural person who systematically informed other companies about the planned and announced procurements, initiated communication about participation in them and coordinated the further actions of the companies. He also prepared and submitted competitors’ offers in the Electronic Procurement System, as well as in some cases represented competitors in communication with customers. Thus, cases were identified when offers of competing companies were prepared and submitted from the same computer and IP address, as well as documents of another bidder were included in the offer of one company. These circumstances, together with the mutual communication of the companies, confirmed that the seemingly independent bidders actually coordinated their participation in the procurements."
It is by no means the first time that the questionable actions of undertakers have risen from the grave to come to the attention of the Competition Council.
In 2018, the CP identified possible signs of collusion in the State Police procurement for the transportation of deceased persons and implemented prevention procedures for 16 companies within six days.
In 2021, following complaints received regarding a possible violation of competitive neutrality in the activities of one of the municipalities, granting its institution exclusive rights to provide – alas, poor Yorick – grave digging services, the KP conducted market surveillance in the grave digging services market in 2021. In recent years, the CP has also received signals about an unregulated competitive environment or other problematic issues in the funeral industry.
For example, the issue of fair competition was identified in the actions of the Preiļi municipality, which placed an advertisement for the offered funeral services by the Municipal Capital Company “PREIĻU SAIMNIEKS” in its own municipal newsletter, contrary to advertising regulations.
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