CFAI Mock Question 49 (Morning) suppliers, vertical, because

mfleming1983

What am I missing? Plastics is packaging, Haines is food. Even the answer says Haines is “closer to the consumer” - thus wouldn’t that imply you a FORWARD vertical merger, because you are moving to the FRONT of the supply chain, as opposed to backwards (towards suppliers)?

iteracom

haines is food.
they make the food, they pack it with plastic and the sell it to distributors ( like supermarket)
if they buy a plastic maker then they backward integrate, since it’s a input of their product.
if they buy PUBLIX and then sell their food with them, that’s forward intergration

stalkey

Why would a food company send their food to a packager? They would buy the packaging and put their food in it, then ship it to stores. If a food company buys the company that is SUPPLYING packaging, it would be backwards