Service Corporation International (SCI) has divested the LaGrone Funeral Home, one of its two funeral homes in Roswell, New Mexico, in settlement of Federal Trade Commission antitrust charges. The proposed settlement is designed to remedy the FTC's anticompetitive concerns arising from SCI's acquisition of the LaGrone Funeral Home.
SCI, based in Houston, Texas, is the nation's largest chain of funeral homes and cemeteries. At the time of the acquisition, LaGrone operated two funeral homes in New Mexico.
According to the FTC, SCI owned the Ballard Funeral Home, a full-service funeral home in Roswell, and in May 1994, acquired the LaGrone Funeral home, the only remaining full-service funeral home in Roswell. The FTC alleged that the acquisition gave SCI a monopoly in the provision of funeral services in Roswell, New Mexico. Funeral services include transporting the deceased from the place of death to the funeral home, embalming and otherwise preparing the body for burial, providing a casket, holding a viewing or other ceremony, and transporting the body to the cemetery or crematorium. Funeral services also include pre-need services - sale of funeral services in advance of actual need. Since the acquisition, according to the FTC, there has been no new entry into the provision of funeral services in Roswell, and after the acquisition, prices for funeral services increased.
In September 1999, SCI sold its Ballard Funeral Home to Sentry Group Services, Inc., a privately-held company that owns and operates 37 funeral homes and one cemetery in Oklahoma, Texas, New Mexico, Kansas and Colorado. SCI's financing subsidiary, Provident Services, Inc., provided the financing for Sentry's acquisition. Provident finances many funeral homes, including SCI's competitors. Provident is a separate subsidiary from the one that operates SCI's funeral homes in Roswell. Provident's loan agreements include a provision that guarantees the confidentiality of information provided to it by funeral home operators
The proposed consent agreement, announced today for public comment, would require SCI to divest the Ballard Funeral Home to a Commission-approved buyer, if SCI acquires Ballard due to default on Sentry's loan, and would prohibit Provident from sharing any information it obtained from Sentry with SCI. In addition, the proposed order would require SCI, for ten years, to give prior notice to the FTC of any proposed acquisition of a funeral home serving Chaves County, New Mexico, where Roswell is located.
The Commission vote to accept the proposed consent agreement for public comment was 5-0. The FTC's Southeast Region handled the investigation.
An announcement regarding the proposed consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment for 30 days, until June 19, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaint, consent agreement and an analysis of the proposed consent order to aid public comment are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 981-0108)