Jewish Funeral Directors Protest SCI-Stewart Megamerger

November 20, 2013
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Article via: Businessweek.com

Here’s something you don’t see every day: Jewish protesters marched outside the headquarters of the Federal Trade Commission on Tuesday carrying (empty) coffins and chanting, “We can’t afford to die with SCI.” Got your attention, right?

Synagogues and Jewish community groups around Washington, D.C., mounted this unusual demonstration to oppose a pending merger between the two largest funeral chains in the U.S. The proposed acquisition by Service Corporation International (SCI) of its closest rival,Stewart Enterprises (STEI), would lead to higher prices for Jewish funerals in and around the nation’s capital, according to the unhappy activists.

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“The FTC must act now to keep traditional Jewish funerals affordable and protect members of our community from the distasteful price-gouging that often occurs when mourners are making decisions about final arrangements at an incredibly vulnerable time,” said Joe Sandler, the president of the Jewish Community Relations Council, in a press release. For photos of the demonstration, click here.

Bloomberg Businessweek readers will recall a recent cover story on the funeral industry, focusing on how SCI is driving consolidation in that traditionally fragmented sector. In many urban areas where it has acquired clusters of funeral homes and cemeteries, SCI has charged higher prices than independently owned rivals. The article described the anxiety in Jewish circles about the SCI-Stewart merger:

Forty-five synagogues in the Washington area have a group contract with a Stewart-owned funeral home in suburban Silver Spring, Md., that provides a traditionally modest Jewish ceremony (plain wooden box, no viewing or flowers) for less than $2,000. “If SCI takes over Stewart, we expect the prices to go up because SCI’s other two funeral homes in the immediate vicinity charge from $5,000 to $10,000 for a Jewish ceremony,” Rudolph says. “Size brings economies of scale. Who benefits from economies of scale is another question.”

[SCI spokeswoman Lisa] Marshall says SCI will honor the Washington-area Jewish group’s option to renew its low-cost contract until 2016. “After that,” she adds, “we’ll certainly want to rebid the contract and hope to keep it, of course at a market-competitive price. I don’t see what all the fuss is about.”

Marshall didn’t immediately respond to an e-mail seeking comment on the protest at the FTC. The agency has been investigating the proposed Stewart acquisition, which SCI has said it hopes to complete by early 2014.

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