(a) The Senate Report also states (see Sec. 779.206 that activities
are ``related'' when they are ``part of a vertical structure such as the
manufacturing, warehousing, and retailing of a particular product or
products.'' Where such activities are performed through unified
operation or common control for a common business purpose they will be
regarded as a part of the enterprise.
(b) Whether activities are vertically ``related'' activities and
part of a single enterprise, or whether they constitute separate
businesses are separate enterprises, depends upon the facts in each
case. In all of these cases of so-called ``vertical operations,'' the
determination whether the activities are ``related,'' depends upon the
extent to which the various business activities, such as a wholesaling
and retailing or manufacturing and retailing, are interrelated and
interdependent and are performed to serve a business objective common to
all. The mere fact that they are under common ownership is not, by
itself, sufficient to bring them within the same enterprise. Thus, where
a manufacturing business is carried on separately from and wholly
independently of a retail business, with neither serving the business
purpose of the other, they are separate businesses even if they are
under common ownership. However, where the manufacturing operations are
performed in substantial part for the purpose of distributing the goods
through the retail stores, or the retail outlet serves to carry out a
business purpose of the manufacturing plant, retailing and manufacturing
will be ``related'' activities and performed for a ``common business
purpose,'' and they will be a single enterprise if they are performed
through unified operations or common control.
(c) In these cases of ``vertical operations'' a practical judgment
will be required to determine whether the activities are maintained and
operated as separate and distinct businesses with different objectives
or whether they, in fact, constitute a single integrated business
enterprise. The answer necessarily will depend upon all the facts in
each case.
