FOR YOUR INFORMATION...........................SEPTEMBER 14, 1993
WISCONSIN PROHIBITION ON JOINT FUNERAL HOME/CEMETERY OPERATION
COULD RAISE PRICES AND REDUCE CHOICES FOR CONSUMERS,
FTC CAUTIONS
A bill to be considered shortly by the Wisconsin legislature
could raise prices and reduce the quality of service and the
choices available to consumers making funeral arrangements, staff
members of the Federal Trade Commission cautioned in comments
made public today. The proposal would ban funeral directors from
operating funeral homes that are connected financially with a
cemetery, or that are located at or next to a cemetery.
According to the FTC staff, an alternative proposal that would
allow joint operation of a cemetery and funeral home could have a
variety of benefits for Wisconsin consumers.
The FTC staff offered its comments on the proposals in a
letter signed by the agency's Chicago Regional Office director,
C. Steven Baker, at the request of state Rep. Marlin D.
Schneider.
According to the letter, current Wisconsin law prohibits a
funeral director from operating a funeral establishment located
within the confines of, or connected with, any cemetery, and from
receiving a commission in connection with the sale of cemetery
lots. Senate Bill 354, introduced last June, would ban joint
operation and bar anyone from operating a funeral establishment
"that is located in or contiguous to a cemetery." An alternative
proposal, on the other hand, would lift the current restrictions.
Schneider had sought FTC comments on which proposal would best
serve the interests of Wisconsin consumers.
- more -
Wisconsin Funeral Proposals--09/14/93)
"[O]ur experience with such restrictions [in other licensed
professions] suggests that their effect is usually to reduce
competition and increase prices," the FTC's Baker said, adding
that the same principle might apply in the funeral industry. For
example, with joint facilities, funeral homes and cemeteries
might be able to reduce overhead and administrative costs, as
well as transportation and transaction costs. In turn, consumers
planning funerals would be able to make decisions in a single
location, saving both the expense and perhaps some personal
concerns during a stressful time. New business formats generally
would boost competition, and the innovations that result "might
afford consumers a wider selection of services and costs," the
FTC staff letter states.
These comments represent the views of the staff of the FTC's
Chicago Regional Office and its Bureau of Competition, and not
necessarily the views of the Commission or any individual
Commissioner.
Copies of the comments, as well as similar comments in
response to a request from a Michigan official in 1991, are
available from the FTC's Public Reference Branch, Room 130, 6th
Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580;
202-326-2222; TTY for the hearing impaired 1-866-653-4261.
# # #
MEDIA CONTACT: Bonnie Jansen, Office of Public Affairs
202-326-2161
STAFF CONTACT: C. Steven Baker, Chicago Regional Office
55 East Monroe Street, Suite 1437
Chicago, Illinois 60603
312-353-8156
or
Michael O. Wise, Office of Consumer and
Competition Advocacy, 202-326-3344
(FTC Matter No. V930024)
(wifunera)