Jorge Manrique’s verses were never as accurate as last year. About half a million Spaniards watched their lives go by and how they died so quietly, with no close relatives, no farewells or wakes. The ravages caused by the coronavirus were reflected in a significant increase in mortality, of 17.9%, according to provisional data from the National Institute of Statistics (INE). Also in makeshift morgues in the big cities and in a non-stop job for the 12,000 employees of the funeral sector, who feel that they have not been recognized enough.
Despite the fact that the white lady appeared so suddenly, the thousand of companies that operate in this atomized business did not benefit economically from the excessive growth of services. This is what Alfredo Gosálvez, secretary general of Panasef, the association that groups them, states: “The pandemic has hardly had any economic consequences for the sector. As surprising as it may seem, for many months the billing was delayed by the closure of the wakes, the absence of ceremonies and the restrictions of the capacity ”. Hence, in the absence of data for 2020, in preparation, Gosálvez estimates that funeral homes will maintain the sales figure for 2019: 1,565 million euros. Something that could also be transferred to 2021, in which they have already recovered most of the services that they could not provide in 2020, but capacity limitations continue, although less strict, and deaths, still above normal, are they are stabilizing.
However, the photo of this industry in which only the first 17 companies have a turnover of more than 10 million euros and only 5 exceed 50 million can change this year. Mémora, the leading company, in the hands of the Canadian investment fund of Ontario Professors (OTPP), looks out of the corner of the eye if the merger between Albia and Funespaña, its next competitors, owned by Seguros Santalucía and Mapfre, respectively, which could unseat it with 70,000 annual services. The National Commission of Markets and Competition (CNMC) authorized the concentration just two weeks ago. But it did so with conditions: Mapfre will have to divest itself of 25% of the resulting company “to avoid situations that reinforce its position in the market” and Santalucía commit to give its clients freedom to choose funeral homes, “avoiding that they are automatically directed to the group funeral home ”. In addition, they will have to divest in Valdepeñas (Ciudad Real).
Concentration
“If the CNMC resolution materializes, it would lead to a market leader,” says Juan Rodríguez, CEO of Albia, who, as in the case of Mapfre, indicates that shareholders are analyzing the situation without providing further details. Because, although the leader Mémora is independent and, with 140 funeral homes and about 40 crematories between Spain and Portugal, it has a turnover of 200 million euros a year with its 55,000 annual services in the Peninsula, according to its CEO, Juan Jesús Domingo, Albia and Funespaña are subsidiaries of insurers with enormous weight in the funeral market. Santalucía leads it, with a premium volume of 686 million euros, 31.5% of the market in 2020. While Albia’s turnover was 165 million. For its part, Mapfre exceeded 310 million in death premiums and its funeral services subsidiary moved 48.6 million euros, almost 12% more than the previous year.
The list continues with Servisa, a subsidiary of Seguros Ocaso, which has a share close to 20% in the so-called death insurance. And the ASV Group, which manages 90 funeral homes, 19 crematoriums and 5 cemeteries. With an expected turnover of 50 million euros in 2021 (55 if the international business is added), the company invoiced 48 million last year in Spain as a result of the reduction in the value of the contracted services, which instead of being around 3,200 euros they barely exceeded 2,700 euros, according to Guillermo Payá, its CEO. ASV also has a funeral insurer, Meridiano, since it is the hiring formula for half of the burials in our country, “it is easier,” admits Payá.
Companies such as Parcesa, Altima or the Madrid funeral company follow the big five in a sector plagued by small family businesses and even single-family ones. For example, in Galicia there are about 200 funeral homes, according to Gosálvez. It is these types of companies with which large companies manage to increase their market share. Mémora has bought more than 15 companies since 2017 with an investment of more than 100 million. Precisely this week, the CNMC has authorized its last two operations: the purchase of Funeraria Rekalde and Funeral Homes Irache. As months before he did with the taking of Jordial by Albia.
In a business liberalized since 1996 and in which the management of the cemeteries is public and, in some cases, concessional (no longer in perpetuity as before, but for between 5 and 15 years), there are also publicly owned operators such as the Company Municipal of Funeral Services and Cemeteries of Madrid, which manages 14 cemeteries, including Almudena, “the largest in Europe, with 120 hectares,” says Carlos Sanza, its secretary general, and funeral homes such as the M-30 or the South Funeral Parlor. Privatized in 1993, it returned to the Madrid City Council in 2016. And it is one of the few companies consulted that last year increased its turnover to 54 million euros due to the significant growth in deaths in the city, which in some months came to be quintupled; five million more than the previous year and of those that will enter this year, foresees Sanza.
The pandemic has revealed the fragility of the sector, such as the lack of coordination with the Administrations, highlights Juan Jesús Domingo. And it has also left lessons for the industry: “As a society, the importance of mourning has been learned and the funeral service has been valued,” says María Dolores Asensi, director of Funexpo, the first international fair in the sector held in Madrid this week , which highlights another transformation derived from the covid: the use of new technologies, for example, in the case of the live broadcast of the ceremonies, which is here to stay. However, the great challenge of the funeral business, normalizing death and eliminating the taboos that accompany it, is still alive in a country that, according to Juan Rodríguez, has the third largest funeral market in the world, after Japan and the United States.