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Debate over Wisconsin ban of cemetery-funeral home joint ownership

Wisconsin funeral homes can't own them and vice versa. Some say that protects consumers, but others call it a competition killer.

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Posted: Monday, July 8, 2013 12:00 am

It was Benjamin Franklin who coined the sardonic proverb, "In this world, nothing can be said to be certain, except death and taxes."

In Wisconsin, you can add to Old Ben's epigram the subcategory of the seemingly never-ending dispute between funeral homes and cemeteries.

For years, Wisconsin cemetery owners have worked to bury an 80-year-old law that prohibits joint ownership of funeral homes and cemeteries. Last year, a bill that would have removed the restriction, again, died in committee.

Mark Graul, a spokesman for the Wisconsin Organization for Responsible Consumerism, a coalition of cemetery owners formed to repeal the prohibition, asserts there will be a similar bill introduced "probably very soon."

There is arguably a greater urgency this time around. Service Corporation International, North America's largest provider of death care products and services, is poised to purchase Stewart Enterprises, which owns five cemeteries in Wisconsin. The acquisition is expected to be completed by early 2014, contingent on the usual regulatory clearances.

Service Corporation International would take on the Wisconsin cemeteries at its own peril.

Under existing law, Service Corporation International would run afoul of the segregation law, and unless the law is changed, the death services company would have to divest or shut down its 15 Badger State funeral homes or the cemeteries included in the merger.

Cemetery owners say the law is anti-free market. Graul goes as far as to describe the prohibition as a perversion of the free-market system and a killer of competition, ultimately hurting the consumer.

Wisconsin's funeral home directors agree that the cemetery owners' legislative campaign is all about the free market -- a campaign by privately owned cemeteries and mega-players like Service Corporation International to monopolize the death-care services industry. If that happens, funeral and burial costs will soar, the Wisconsin Funeral Directors Association predicts.

"The Legislature in 1933 had the wisdom to bifurcate these two industries to help families in their time of need," said Adam Raschka, acting executive director of the funeral directors group. "This is the most difficult time in their lives. People are grief-stricken and can be taken advantage of."

Eleven (mostly northeastern) states have some kind of restriction on "combination firms" that own and operate both funeral homes and cemeteries. Wisconsin and Michigan maintain the strictest prohibitions in the nation.

Raschka and members of the association see the rapid growth of big-chain death care providers like Service Corporation International as a battle of small, independently owned funeral homes versus conglomerates.

Once the giants move in, funeral and cemetery prices might go down in the short term, but prices inevitably rise after small funeral homes are driven out of business, Raschka said. He pointed to a "60 Minutes" investigation in the latter 1990s that spotlighted Service Corporation International's purchase of several funeral homes and cemeteries in the Tampa, Fla., metropolitan area. The mass acquisitions drove up average funeral service prices by nearly $1,000 within 18 months at one funeral home.

Service Corporation International did not return a call seeking comment.

Cristina Camacho, funeral director of Steil Camacho Funeral Home and Crematory in Darlington, said she is not "anti-corporate," but she fears the fall of small-town funeral homes at the hands of rapidly growing chains like Service Corporation International.

Until the 1980s, the funeral industry was defined by locally owned funeral homes nationwide. The family-owned businesses, many that began as town cabinetmakers and furniture stores, served generations of families.

That is until Houston-based Service Corporation International set out to revolutionize death services by "acquiring and consolidating smaller companies into large, scalable operations," according to Seeking Alpha, an online stock market news and financial analysis site.

Service Corporation International owns 1,450 funeral homes and 374 cemeteries in the United States, Canada and Germany.

In small towns like Darlington, cemeteries are owned by communities and churches. The 80-year-old anti-combo law doesn't have much impact on such rural funeral homes, but Camacho said it protects independent operators from encroachment by big-chain death services providers.

"We're small-town people who expect their neighbors to be serving them when they need help," she said. "We still have radio stations that have our obituaries on during their newscasts."

Raschka said lawmakers and residents must be satisfied with the law. The state Supreme Court has upheld it on a number of occasions, and in the early 1990s, the Legislature strengthened the law after a similar push at repeal.

Not everybody sees it that way. Glen Porter, president of Highland Memorial Park in New Berlin, put it this way last year:

"This regulation makes as much sense as passing a law to force fans at Lambeau Field to buy their brat at one stand and their beer at another. Cemetery owners in Wisconsin believe healthy competition will improve customer service and lead to lower prices."

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