No money was collected from the funeral – Newspaper Kommersant No. 31 (7476) dated 20.02.2023

At the end of 2022, due to a decrease in mortality against the backdrop of a noticeable increase in the first years of the pandemic, the volume of the Russian funeral services market increased below inflation by 5%, to 86 billion rubles. Moreover, in the most densely populated region – Moscow – the revenue of funeral companies fell by 20%. A significant part of Muscovites, due to high prices in the capital, bury their loved ones in the suburbs, where the income of the ritual business, on the contrary, is growing three times faster than the market as a whole. Experts expect that the trend will continue and in 2023 the market turnover in the Russian Federation will decrease. But they emphasize that official statistics still do not adequately reflect the situation on the funeral market, which in many respects remains “in the gray zone.”

The revenue of funeral companies throughout the Russian Federation in 2022 increased by 5% year-on-year, to 86 billion rubles, Kommersant calculated based on Rosstat data. For comparison: over the same period, inflation in the country, according to the agency, amounted to 11.94%. In the first two years of the pandemic, the dynamics of revenue growth was more noticeable – by 25% in 2020 and by 28% in 2021.

Director of the Institute for the Study of Contemporary Politics Anton Orlov explains the moderate growth in 2022 by a decrease in mortality and a slight increase in the cost of funeral paraphernalia. According to preliminary data from Rosstat, in 2022, mortality in the Russian Federation decreased by 22.1% year-on-year, to 1.9 million people. People with chronic diseases who could have died within the next ten years died in the first two years of the pandemic, said Ilya Boltunov, owner of the Zhuravli funeral homes. Market participants and experts refused to comment on the dynamics of mortality in connection with military operations in Ukraine.

Among the four major regional markets in Russia, the volume of sales of funeral services is noticeable – by 16% year-on-year, to 7.1 billion rubles – increased in the Moscow region, in the Leningrad region – by 11%, up to 994 million rubles, in St. Petersburg – by 8%, to 8.1 billion rubles. At the same time, in Moscow, the total revenue of funeral companies decreased by 20%, to 8.4 billion rubles, follows from Rosstat data. In the largest participant in the Moscow funeral services market, GBU Ritual did not respond to Kommersant’s request.

Anton Avdeev, a member of the commission for professional qualifications in the field of funeral business of the National Council under the President of the Russian Federation, considers the reason for the decrease in the turnover of the ritual market in Moscow to be the increase in the share of “social” funerals subsidized by the authorities. According to the mayor’s office, 21.6 thousand rubles are now allocated for such a burial in the capital. The average check for a funeral that does not fall under the social category is 135 thousand rubles, Artem Ekimov, head of the Ritual State Budgetary Institution, said in an interview with RBC.

In addition, many manufacturers of ritual goods operating in Moscow are registered in the Moscow region and their revenue is taken into account in the region, adds Anton Avdeev. Also, Muscovites are increasingly choosing free cemeteries in the suburbs for the burial of loved ones, since funerals in the capital’s cemeteries are much more expensive and not available to most citizens, adds Anton Orlov.

Anton Avdeev believes that the decline in the purchasing power of the population will intensify, which means that the average check in funeral services will continue to decline. In combination with a low mortality rate, according to the director of the Novosibirsk crematorium Boris Yakushin, this will lead to a drop in the turnover of the funeral market in 2023 in the whole country.

But Rosstat data do not reflect the real picture of the market, Ilya Boltunov believes. The main reason is that the funeral business, despite numerous attempts by legislators to restore order and make it transparent, remains predominantly a shadow business, agrees Anton Orlov. According to him, ritual companies and especially managers of cemeteries receive the main income unofficially.

Another attempt by the authorities to bring order to the industry has not yet been successful. In March 2022, the State Duma submitted a bill “On the funeral business”, which was supposed to replace the document that had not changed since 1996. Then the market reacted negatively to the project: companies and lawyers considered that its adoption in its original form could worsen the situation of the industry, and the abuse of dominance by some companies would increase (see Kommersant dated March 21, 2022). Consideration of the document stopped there. One of the authors of the initiative, State Duma deputy Svetlana Razvorotneva, did not comment on the reasons for freezing the bill.

Daria Andrianova