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)