The American Way of Death Revisited - Jessica Mitford [105]
But that is a small gesture compared with the current goal of FAMSA—the umbrella organization for the 125 nonprofit funeral and memorial societies in the U.S.—which is nothing less than to recast the FTC rule altogether to make it truly, in the FTC’s own words, “proactive” on behalf of the long-neglected consumer. High on the list of changes being sought are elimination of the nondeclinable fee and bringing cemeteries under coverage of the rule.
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A Global Village of the Dead
Of all the changes in the funeral scene over the last decades, easily the most significant is the emergence of monopolies in what the trade is pleased to call the “death care” industry. Leaders in the drive to upgrade and up-price funerals, the principal beneficiaries of the Federal Trade Commission’s ignoble retreat, are the multinational corporations that have put their imprint on every facet of the business. Of the three publicly traded major players—Service Corporation International (SCI), the Loewen Group, and Stewart Enterprises—SCI, incorporated in 1984, is the undisputed giant.
To trace its brilliant trajectory, a good starting point is its 1995 annual report to stockholders, which vibrates with pride of accomplishments: “SCI experienced the most dynamic year in its history in 1994, reaching new milestones in revenue and net incomes while establishing a solid presence in the European funeral industry.” Revenues exceeded the $1 billion mark for the first time. Its crowning achievement was the takeover of some 15 percent of British funeral establishments added to its existing 9 percent in the U.S. and 25 percent in Australia.
Ever on the prowl, by mid-1995 SCI had devoured yet another large U.S. holding, Gibraltar Mausoleum Corporation, with its 23 funeral homes and 54 cemeteries, and had obtained a foothold in Europe with the acquisition of France’s largest funeral chain, Lyonnaise des Eaux, comprising 950 funeral homes in France and others in Switzerland, Italy, Belgium, the Czech Republic, and Singapore.
SCI’s annual revenue for 1995 exceeded $1.5 billion. By 1996 its prearranged funeral revenue surpassed $2.3 billion and its prepaid cemetery sales accounted for an additional $251 million.
Given these outstanding accomplishments, much now depends on the level of performance of the Grim Reaper. Can he be counted on to do the job? Mortuary Management was gloomy on this score, noting that due to medical advances in the treatment of cancer and heart disease, the death rate was bound to decline.
Not so the brokerage houses and investment analysts, who are showing much interest in the new “consolidations,” as they are called. The Goldman, Sachs brokerage house, analyzing their prospects, predicts a rosy future:
Aggregate deaths have increased at roughly 1.1 percent on a compound basis since 1940.… Going forward, the continued aging of the baby-boomers, coupled with an increasing proportion of people over age 65, should keep aggregate deaths rising.… The aging of America should enable the death care industry to experience extremely stable demand in the future.
The Chicago Corporation is equally sanguine. “The addition of well-chosen death care stocks to an investment portfolio can increase the value of that portfolio nicely.” One advantage cited: “Consumers rarely comparison shop due to the infrequency of purchase, which averages once in every 14 years. In many instances, a deceased’s survivors will trade up for more expensive options than what may have already been prearranged.” There is also a word of caution:
Cremation, which is becoming an increasingly popular option, is seen as the biggest risk to the industry. We agree that it is a risk, but do not believe that it is as great as perceived—and it may even yield some opportunities. Moreover, there are risks inherent in the aggressive strategies and tactics favored