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The Honolulu Advertiser
Posted on: Sunday, July 17, 2005

Funeral industry mourns over China-made caskets

USA Today


SAN FRANCISCO — Add another item to the growing list of cheaper goods China is cranking out for U.S. consumers: coffins.

Chinese casketmakers have captured less than 2 percent of the U.S. market since entering it about three years ago. But that's enough to worry the funeral industry, where caskets are a key source of profit. Chinese makers are expected to boost production further, as they have in sectors they now dominate, from electronics to shoes.

China's entry comes as the U.S. funeral industry fights four federal lawsuits alleging that leading funeral home chains and a top casketmaker are conspiring to fix coffin prices. They did so, the lawsuits claim, to crush independent sellers — including Costco Wholesale, the big retailer that started selling coffins last year.

The growing popularity of cremation adds to industry woes, because cremation does not require an expensive casket. U.S. cremation rates are expected to soar to 43 percent in 2025 from about 29 percent today. Underscoring the industry's angst: Just last week, California funeral-home owners attended a seminar at their annual meeting here on the challenge posed by China and Costco.

Caskets made in China sell for as much as 25 percent less than those produced in the USA, says Troy Shockley of Greenville Funeral Supply, a leading importer based in South Carolina. It imports fewer than 15,000 Chinese-made caskets annually.

Lower prices, he says, translate into potentially big savings for consumers, who often spend thousands for a coffin. "Any time you can pass along a savings to a consumer, it's a benefit," Shockley says. "Competition is good."

Greenville's upscale Edward model, for example, has a suggested retail price of $2,300, compared to $3,000 for similar coffins made domestically, Shockley says.

About 1.7 million coffins will be sold this year in the United States, says the Casket & Funeral Supply Association of America.

Caskets often represent as much as half the average $6,500 cost of a traditional funeral (excluding cemetery expenses). What's more, they carry a big mark-up: as much as 600 percent, says the Funeral Consumers Alliance, a non-profit group that is the lead plaintiff in one of the price-fixing lawsuits.

Further squeezing the funeral industry: More independent sellers such as Costco and dozens of online retailers have gotten into the market since federal regulators ruled funeral homes must accept coffins bought directly by consumers, often at discounted prices, instead of through the funeral provider.

Costco sells metal caskets for as little as $925, including shipping. The chain would not reveal exact sales figures. But consumer response has been good. "We are pleased with the results," says vice president Gary Ojendyk.

Boutique casketmakers are piling in, too. Near Dubuque, Iowa, monks at the New Melleray Abbey have been making and selling traditional wood caskets since 1999. The abbey and its 38 monks, owners of one of Iowa's biggest forests, wanted to diversify beyond farming, says Sam Mulgrew, general manager of the casket operation.

They now sell about 120 caskets a month, at prices ranging from $775 to $1,975, excluding shipping. "Our prices are equivalent to wholesale prices," Mulgrew says.

The monks and similar shops are tapping a market where tastes are changing as baby boomers age. "People want something that's handcrafted," Mulgrew says.

The Internet makes these sellers' success possible by leveling the playing field with bigger manufacturers such as Batesville Casket in Batesville, Ind.

The four lawsuits challenging casket pricing began with one filed in May in San Francisco that seeks class-action status. It claims Batesville and three funeral chains with about 2,150 homes conspired to boycott retailers that are independent of traditional funeral homes. The lawsuit says the defendants also coordinated casket pricing and disparaged the independents and their coffins.

Batesville and the other defendants — Service Corp. International, Alderwoods Group and Stewart Enterprises — deny the allegations.

The lawsuit's first hearing is scheduled for Aug. 4.