Big 3 Casket Companies Being Sued, Creating a Monopoly?

August 3, 2010
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imageThis week a federal judge in Houston, Texas will determine whether the three biggest casket companies (Batesville, Aurora, and Matthews) are shirking FTC rules and creating a monopoly in the deathcare market according to recent audio from marketplace.publicradio.org.

Snippet from Audio:

Bill Radke: Until the 1980s, a funeral home was the only place you could buy a casket. The Federal Trade Commission has since tried to allow more competition, but consumer advocates say the agency hasn’t done enough. They’ve sued the three biggest casket companies. Reporter April Dembosky says the case goes before a federal judge in Houston this week.

Listen to the audio recording and read along with the transcript below.

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Audio Transcript:

Bill Radke: Until the 1980s, a funeral home was the only place you could buy a casket. The Federal Trade Commission has since tried to allow more competition, but consumer advocates say the agency hasn’t done enough. They’ve sued the three biggest casket companies. Reporter April Dembosky says the case goes before a federal judge in Houston this week.

April Dembosky: To get around current FTC rules, the top three casket companies in the country wrote new internal distribution policies. They said they would sell caskets to anyone, but they would only deliver them to funeral homes. Consumer attorney Gordon Schnell says that allowed these companies to dominate 70 percent of the casket market.

Gordon Schnell: The defendants along with other funeral homes have entered into a conspiracy to restrict competition from discount casket sellers so they can keep their casket pricing artificially high.

Attorneys for the casket companies refused to comment on the record. But Mark Allen from the Casket and Funeral Supply Association of America insists theres plenty of competition in his industry.

Mark Allen: I’m contacted every week by a new upstart company thats trying to get some advice for getting started in this industry.

And thats getting harder these days as more people choose cremation. No burial, no need for a fancy casket.

I’m April Dembosky for Marketplace.

End of Transcript

Source: marketplace.publicradio.org

This type of lawsuit could have huge implications for other funeral industry companies as well. What about burial vault companies who only sell to funeral homes (or licensees who only sell to funeral homes)?

Could this bring about the change where minimal merchandise is purchased at the funeral home and the casket and vault are brought in by the family?

Could Walmart be the next big burial vault distributor?

I guess the only thing that has been protecting the big vault companies is the fact that their products are concrete and weight 1500+ pounds.

What kind of effect could this have on the funeral industry and funeral directors?

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