Proposed Consent Agreement In the Matter of Service Corporation International and Stewart Enterprises, Inc.; File No. 131-0163 #00071

Submission Number:
00071
Commenter:
David Smith
State:
Maryland
Initiative Name:
Proposed Consent Agreement In the Matter of Service Corporation International and Stewart Enterprises, Inc.; File No. 131-0163
Dear Commissioners, During the initial comment period on the proposed merger of SCI and Stewart my wife and I submitted comments to the FTC staff as well as to the Maryland State Attorney General's Office. While we were gratified that the FTC staff correctly recognized that the merger of SCI and Stewart would harm competition in the Jewish funeral home market in the DC/MD area, it's proposed remedy is wholly inadequate in addressing the problem. Requiring the divestiture of Edward Sagel Funeral Direction by SCI would not adequately protect competition in the market. Sagel, which started out as a cut rate competitor to Danzanky-Goldberg, was ultimately acquired by SCI. It now basically functions as a storefront. It lacks a chapel and adequate facilities to handle the deceased. Jewish practice requires a space to perform "tahara" (ritual washing of the body) and "shemira" standing watch over the body prior to the burial. Sagel is wholly dependent on Danzansky - for these services. Its market share has fallen from 25% to 11% in the last three years. If it is divested it is highly unlikely to remain an effective competitor in the market. The staff's proposed remedy would be analogous to permitting SCI to form a "new" Jewish funeral home which consists of a post office box and then permitting it to divest itself of this "competitor." This competitor is not a real competitor and provides minimal relief from the concentration of ownership caused by the merger. Moreover, with the control of both Danzansky and Hines Rinaldi, SCI will still have the incentive and ability to deter the important competition provided by the Jewish Funeral Committee of Greater Washington contract. We urge the Commission to revise the proposed consent decree and require the divestiture of Hines Rinaldi. Alternatively, the Commission could block the merger entirely. Sincerely, David R. Smith & Rosalyn S. Soref