Monday, March 30, 2020

Lyns overprices cost of dying – claims

Lyns Funeral Parlour, a member of the FSG Limited, is being accused of overpricing its services and products and driving competitors out of business.

But FSG Limited denies this.

Smaller funeral undertakers fear their businesses may go under, buried by the partnership between FSG Limited (Lyns Funeral Parlour) and its underwriters Botswana Life which may provoke a cascade of bankruptcies.  

FSG Limited is the leading funeral services provider and the biggest in the country enjoying a 65% market share with an annual revenue exceeding P165 million coupled with an asset base of more than P300 million.

Botswana Life has 32.2 percent shareholding in FSG.

The dominance and the suspected price manipulation, which seemingly go with it, have gone unchecked.

By the same measure, there is a grave concern that Lyns Funeral Parlour rides roughshod over customers.

A bereaved family said they had to pay an arm and a leg to bury their loved one last week. 

Monica Molapisi, whose elder sister’s deceased daughter, Chawada Keabilwe’s corpse was kept for one day at Lyns after staff at Extension 2 clinic told them to take the corpse to the private mortuary narrated how her family suffered emotional shock when Lyns slapped them with a P7000 bill because they did not have a funeral policy with FSG and did not buy a casket from the undertaker. We herein publish proof of a scanned copy of such payment. Lyns competitors charge an average daily rate of not more than P600.00.

“We feel they are creating a hidden cost. We were surprised that we were asked to pay before collecting the corpse. Our biggest query was for the mortuary to explain what the extra “using own casket was for” which was never explained to us in the first place. They do not have a public notice in their premises to guide prospective clients how they are charged,” fumed Monica’s brother and former Yarona Fm radio presenter, Brando Keabilwe.

Lyns would not explain why they are charging a handling fee which includes collection charged at P5000 (after adding VAT) once a deceased person is collected from a government mortuary regardless of the duration of stay – charges which are cumulative in clear terms.

A daily corpse storage fee of P1000 is charged but in the case of the Molapisis, they were charged P1,785.00 for one day of refrigeration of a corpse.

“The underwriter [Botswana Life] is the one who prescribes the terms and conditions applicable to a funeral policy. FSG is not the underwriter but only the service provider. Our principal business is sale of coffins and caskets, which are part of the funeral service we render to our customers. Any customer buying a casket from elsewhere and coming to FSG for funeral service is not a viable proposition for us and makes no business sense,” said Moribame-Setiko.

Doreen Motshegwa, the spokesperson for the Ministry of Health and Wellness, said government has long had an arrangement with private undertakers who when government mortuaries are full, receive corpses on behalf of the government at no cost to the bereaved family – government bears the costs. She could not say how much on average private undertakers charge the government for such services per corpse per day.

The Sunday Standard investigations have established that a casket called DomC (Dominion) imported from China which goes for USD 350 (Three hundred and fifty dollars) or the equivalent of P3500 (Three thousand five hundred Pula fetches P43 700 (Forty-Three Thousand seven hundred Pula) at Lyns.

A casket (Royal House Dome) which Lyns buys from South African Funeral Suppliers for R6000.00 is locally priced at P28 000.00 at one of its displays in Gaborone.

Pricing for similar caskets which Lyns buys from a Chinese supplier, Wuhu Yuangfeng Import and Export Co. Ltd, include Emperor USD 400 (Four hundred Dollars, HC2 (Hand Craft) USD 465 (Four hundred and sixty-five Dollars) or P4650.00 Last Supper USD 410 (Four hundred and ten Dollars) or P4100.00 and Kenwoood USD 365 (Three hundred and sixty-five Dollars) or P3600.00 but they fetch P26 000 on average.

On that score, Lyns denies it is overpricing its products and justifies the pricing.

“Funeral business is a capital-intensive and man-power intensive business. Our pricing of caskets are in line with our procurement cost, operating cost and cost of rendering service to our clients, of the standard that they are accustomed to. We apply practices that keep us competitive, without being punitive to our customers as we want to remain in the market and be the leading player,” said Moribame-Setiko.

The Competition Authority, tasked with enforcing competition law and policy under the Competition Act of 2009 to monitor, control and prohibit anti-competitive trade or business practices in the economy has still to delve into the workings of the undertaker business.

The Authority’s Director of Communications Gideon Nkala said while the authority has not received any complaints from players in the funeral services sector regarding anti-competitive conduct, it has not done any research into the conduct of undertakers.

“We have not received a complaint relating to the alleged conduct of Lyns in the sale of caskets neither have undertaken any market study in this sector. Without the benefit of such insight, it would be very difficult to make any determination on any anti-competitive conduct including excessive pricing” said Nkala. He said the authority will look into the sector to ascertain allegations of overpricing and market dominance.

The acting President of the Funeral Parlour Association of Botswana, Boy Mokgwathi, said the association is all the more worried by FSG’s dominance and its unfair competition which threatens to squeeze them out of business.

“It is unfortunate that there is no law which regulates funeral service providers. To be honest, funeral parlours are dragging feet to self-regulate on issues such as pricing and professional conduct. Government has been reluctant to deal with individual funeral parlours in the absence of an association so we eventually formed one. Lyns is not a member despite being a dominant player. Our bone of contention is that Botswana Life has a huge clientele base so by partnering with FSG the playing field becomes uneven,” said Mokgwathi.

Still, Lyns denies unfair competition.

“We believe that competition in any environment is healthy for both customers and ourselves because it allows our customers to see and experience FSG service standards and also help us to improve ourselves,” said said Tebogo Moribame-Setiko Head of Sales at FSG Limited.

“As with any business, there are a number of suppliers, partners and associates dealt with that are either unregulated and/or unrelievedly, are not within the same industry or sector.

Our efforts as Botswana Life are to ensure that all stakeholders or businesses with whom we engage are vetted, KYC registered with us as a vendor or partner accordingly, and, from our due diligence, proven to be above board and with sound governance and ethics” said Gabriel Tlagae  Botswana Life PR, Communications & Marketing Manager.

He said: “FSG provides broader services that not only benefit our mutual clients but the general public and has been providing these services professionally and diligently over the years. Our size as a business, and indeed the size and reputation of FSG, in some ways offers efficiencies and value that we are able to pass onto our valued clients. We strive to continually ensure all aspects of the business are above board, as we owe it to our colleagues, clients and wider stakeholders to live true to the trust they continue to place in us.”

RELATED STORIES