Area synagogues and Rep. Chris Van Hollen (D-Md.) have come out against the announced merger of two of the largest funeral companies in the United States.
Service Corporation International (SCI), the largest, announced May 29 that it had signed an agreement to acquire the second largest, Stewart Enterprises, for $1.4 million.
Should the Federal Trade Commission (FTC) approve the merger, many here are concerned that a contract worked out with the Jewish Funeral Practices Committee of Greater Washington, as well as numerous individual contracts between individual synagogues and area funeral homes, will be phased out. That could result in individual funeral costs rising by about $4,000 and the end of special arrangements which allow Jews to observe mourning rituals.
“We need people to air their concerns with the FTC. That’s vital,” said anti-trust attorney David Balto, who is representing the funeral practices committee pro bono.
Currently, 48 synagogues in the D.C. area are members of the committee, but everyone who requests a Jewish funeral is eligible for a complete, although basic, funeral package at a greatly reduced price of $1,820 with Hines-Rinaldi Funeral Home in Silver Spring, which is owned by Stewart Enterprises.
That contract also holds off billing the family during the shloshim, the first 30 days of mourning. Also, the family doesn’t even have to go to the funeral home to make the arrangements as that can be done by email or fax.
That avoids what Balto referred to as “up-sales,” including more elaborate caskets.
“The most vulnerable consumers are the bereaved. They are very susceptible to being taken advantage of,” he said.
When asked if he expected costs to increase and special arrangements to go by the wayside should pricing decisions be made by SCI, Balto replied rhetorically, “What do you expect is going to happen here?”
Balto explained that there are two stages in the FTC process. The first stage, which lasts 30 days, involves a general information-obtaining process.
The second stage, which is currently going on, is “incredibly intensive and voluminous” and involves “millions of pages of documents” and lots of interviews.
While the second stage does not have an end date, it usually lasts about six months, Balto said, noting that since the FTC doesn’t announce the official start of deliberations, it is hard to predict when it will decide.
However, Lisa Marshall, spokesperson at SCI, said she expected the processs to be completed by the end of this year “or at the latest early January.”
That decision does not have to be a simple yes or no to the merger. Often, the FTC will approve a merger but insist that certain individual companies be exempt from being bought out to avoid monopolies in certain geographic areas.
Balto said that “a lot of congregations” have sent letters or made phone calls to the FTC asking to exempt Hines-Rinaldi or not approve the merger at all.
Van Hollen sent a one-page letter to Edith Ramirez, chairwoman of the FTC, in which he wrote, “I share the concerns of my constituents about the need to ensure that members of all religious faiths have diverse and competitive options with respect to funeral homes.”
In that letter, Van Hollen asks that the FTC’s review “give thorough consideration to the impact of the merger on the Jewish community in Montgomery County, Maryland.” He called the funeral practices committee “a vital and innovative communal organization that serves as a model to community funeral practice organizations throughout the United States.”
Balto is optimistic that the congressmen’s letter will help, noting, “Van Hollen is a tremendously important member of Congress, and I’m sure his letter is going to attract a great deal of attention.”
Also weighing in with concerns about the merger is the Funeral Consumers Alliance, a national nonprofit in Vermont designed to protect the rights of funeral consumers.
That organization is on record opposing the merger, noting that if approved, SCI will control more than 2,000 funeral homes and cemeteries across the country.
“Bigger isn’t better when it comes to funerals. Unlike Walmart or Costco, SCI’s savings from economies of scale don’t get passed on to the customer family. They go to the company’s true customer, the shareholder,” the organization stated in a press release.
“SCI has devoured the other funeral home chains over the past several years and now is the king of the hill in most major metropolitan markets. And the results have not been good for consumers. These mergers have led to higher prices and deteriorating services,” said Josh Slocum, executive director at Funeral Consumers Alliance.
Along with the FTC, the Maryland attorney general’s office must approve the merger.
In an email to Washington Jewish Week, Attorney General Gansler explained, “My office is taking a thorough look at the proposed acquisition of Stewart Enterprises by Service Corporation International to determine its impact on the availability and cost of funeral services in the Washington, DC area and throughout the state. I want to ensure that all consumers in Maryland will continue to have reasonable choices of funeral services at affordable prices.”
Some synagogues have worked out individual agreements with Danzansky-Goldberg Memorial Chapels and Edward Sagel Funeral Direction, both located in Rockville and both owned by SCI. Some synagogues also work closely with Torchinsky Hebrew Funeral Home in D.C., an independent company.
When contacted, neither owner Joyce Torchinsky nor a spokesman at Danzansky would comment on the proposed merger.
To help in its efforts, the JFPCGW is asking people to voice their objections by writing to the Hon. Edith Ramirez ([email protected]) and Jill Frumin ([email protected]) at the FTC, Gansler ([email protected]) and Ellen Cooper ([email protected]), at the Maryland attorney-general’s office. The committee also suggests people speak with their senators, congressmen and Jewish community leaders and ask them to write letters as well.