NIS2 for Food: Production, Processing and Distribution

In this lesson

Quote Annex II, point 4, exactly, and break it into its two filters: a food business, engaged in the activities the row names.
Read the definitions of Regulation (EC) No 178/2002 that the row relies on.
Separate what the row covers from what it does not name, such as retail, catering, restaurants and feed, and record the questions the text does not settle.
Identify the legal person that is the entity, and write a scope memo a supervisor can follow line by line.

One row, no subsectors

Annex II of Directive (EU) 2022/2555 lists the other critical sectors, as opposed to the sectors of high criticality in Annex I. Point 4 is the food sector. Like every row, it has three columns: sector, subsector and type of entity. The sector column reads Production, processing and distribution of food. The subsector column is empty: the food sector has no subsectors.

For the list of entities, article 3(4)(c) asks each entity for “where applicable, the relevant sector and subsector referred to in Annex I or II”: a food business declares a sector and no subsector.

Point 4, word for word

Annex II, point 4

The type of entity column reads:

“Food businesses as defined in Article 3, point (2), of Regulation (EC) No 178/2002 of the European Parliament and of the Council (3) which are engaged in wholesale distribution and industrial production and processing”

Footnote (3) identifies Regulation (EC) No 178/2002 “laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety”, published in OJ L 31 of 1 February 2002: the General Food Law. This course quotes that published text, the one the footnote cites; before relying on a provision in a dispute, check the consolidated version on EUR-Lex.

The row has two filters, and an undertaking must pass both: it must be a food business as the regulation defines it, and it must be engaged in the activities the row names.

Filter one: a food business

Reg. 178/2002, art. 3(2)

Article 3, point (2), defines a food business as “any undertaking, whether for profit or not and whether public or private, carrying out any of the activities related to any stage of production, processing and distribution of food”. Three consequences follow.

Profit is irrelevant. A cooperative, a foundation or a non-profit association can be a food business.
Ownership is irrelevant. A publicly owned abattoir or a municipal company can be a food business, just as article 2(1) of NIS2 applies to “public or private entities”.
Any stage counts. Article 3, point (16), defines the stages as “any stage, including import, from and including the primary production of a food, up to and including its storage, transport, sale or supply to the final consumer”. Importers, farms, cold stores and carriers handling food all carry out activities related to a stage.

What counts as food

Reg. 178/2002, art. 2

Article 2 defines food as “any substance or product, whether processed, partially processed or unprocessed, intended to be, or reasonably expected to be ingested by humans”. It includes drink and chewing gum. It excludes feed, live animals unless prepared for placing on the market for human consumption, plants prior to harvesting, medicinal products, cosmetics, tobacco, narcotic or psychotropic substances, and residues and contaminants.

The feed exclusion has a direct consequence. Article 3, point (5), defines a feed business separately, and the annex row refers only to point (2). A mill producing compound feed for farm animals is not of the point 4 type on the wording, unless it also carries out food activities.

Food business and food business operator

Article 3, point (3), defines the food business operator as “the natural or legal persons responsible for ensuring that the requirements of food law are met within the food business under their control”. The regulation separates the undertaking (the business) from the persons responsible for it (the operator). NIS2 obligations attach to the entity, which article 6(38) defines as a natural or legal person recognised under the national law of its place of establishment. Your memo names the legal person that runs the qualifying activity.

Filter two: the activities named

Annex II, point 4

Being a food business is not enough: a food business engaged in none of the named activities is outside the row.

What the text does not define

Neither NIS2 nor Regulation (EC) No 178/2002 defines wholesale distribution, industrial production or processing. The regulation does define placing on the market as “the holding of food or feed for the purpose of sale, including offering for sale or any other form of transfer, whether free of charge or not, and the sale, distribution, and other forms of transfer themselves” (article 3, point (8)), which confirms that distribution and holding stock for sale are activities of food law, but it does not say what makes distribution wholesale.

Three questions remain open on the text, and a scope memo records how it answers each.

What makes production industrial. No definition exists. Compare the CER Directive, whose food row speaks of “large scale industrial production and processing” (lesson m1l2): NIS2 does not say large scale. Without a definition, a written analysis may consider, as practice, mechanised or automated lines, output destined for other businesses rather than for sale at the point of production, and continuous volumes. None of these is a legal test.
Whether one activity is enough. The row joins the activities with “and”. It does not say whether a business must carry on all of them or whether wholesale distribution alone, or industrial production and processing alone, is enough. This course works on the second reading, which matches the sector heading, production, processing and distribution of food. That is a reading, not the text: record it and check the national wording on /transposition. The practice cases of this course apply this working reading.
Primary production. Article 3, point (17), defines primary production as “the production, rearing or growing of primary products including harvesting, milking and farmed animal production prior to slaughter”, and it is a stage of production. Whether a large farm, greenhouse or fishing fleet is engaged in industrial production is not settled by either text.

What the row does not name: retail

Reg. 178/2002, art. 3(7)

Article 3, point (7), defines retail as “the handling and/or processing of food and its storage at the point of sale or delivery to the final consumer, and includes distribution terminals, catering operations, factory canteens, institutional catering, restaurants and other similar food service operations, shops, supermarket distribution centres and wholesale outlets”.

A shop, a restaurant or a caterer is a food business. But the row does not name retail. A business engaged only in retail is not engaged in wholesale distribution or industrial production and processing, and is outside point 4 on the wording. Two cautions follow.

Not an exclusion clause. The row includes; it does not exclude. Compare Annex II, point 2, which covers waste management “excluding undertakings for whom waste management is not their principal economic activity”. Point 4 has no such clause. A retail group that also runs an industrial bakery, or supplies franchisees as a wholesaler, is engaged in a named activity, and the row does not ask whether that activity is its main one.
A definitional tension. Food law counts “supermarket distribution centres and wholesale outlets” as retail. NIS2 does not refer to article 3, point (7); it uses its own undefined words, wholesale distribution. Whether a supermarket distribution centre, retail in food law, is engaged in wholesale distribution for NIS2 is not settled by either text. Record the question and check national guidance.

Neighbouring rows

Annex I, points 6 and 7

Food includes drink. Annex I, point 6, covers “Suppliers and distributors of water intended for human consumption” as defined in Directive (EU) 2020/2184, which this course does not analyse: a water bottler checks that row too (see the water certification), because an entity of an Annex I type above the medium-sized ceilings is essential under article 3(1)(a). Annex I, point 7, excludes undertakings for which treating industrial waste water is “a non-essential part of their general activity”, a clause a food plant treating its own effluent should examine.

Profiles side by side

Profile	Food business?	Named activity?	Next step
Dairy processing milk on automated lines	Yes	Industrial production and processing	Size test
Wholesaler supplying shops and restaurants	Yes	Wholesale distribution	Size test
Restaurant chain without central production	Yes, retail	None named	Record and close
Supermarket chain with its own distribution centres	Yes, retail under art. 3(7)	Open question	Written reasoning, national check
Compound feed mill	No, feed business	Not applicable	Record and close
Third-party cold store and refrigerated transport	Yes, storage and transport are stages	Open: logistics is not named	Written reasoning; see CER in m1l2

In practice

A fictional agri-food group, here called Hallerby Foods, totals 795 annual work units across five subsidiaries, all majority-owned by the parent, so each subsidiary is measured with the group's data and exceeds the medium-sized ceilings (lesson m1l2). Its scope memo has one line per legal person.

Hallerby Dairy, which turns milk into cheese and yoghurt on automated lines: food business, industrial production and processing, point 4. Hallerby Distribution, which sells to restaurants and shops: food business, wholesale distribution, point 4. Hallerby Farm Shops, twelve shops selling to consumers: retail under article 3, point (7), no named activity, outside point 4. Hallerby Feeds, which makes compound feed for member farms: a feed business, outside point 4 because feed is not food. Hallerby Cold Logistics, which stores and transports chilled goods for the group and for other companies: a food business, but whether storage and transport amount to wholesale distribution is open; the memo records the reasoning, flags that the CER food row names logistics, and asks counsel to check the national wording.

What a supervisor will ask

Why are you, or are you not, of the point 4 type? A scope memo quoting the row and mapping each activity of each legal person to its words.
How did you treat the open questions? The written reasoning on industrial, on whether one activity is enough, and on any retail or logistics activity, with the national guidance consulted.
Which legal person is the entity? A group chart showing which company produces, processes, distributes or sells at retail.
What did you declare for the list of entities? The information submitted under article 3(4), with the sector and no subsector.

Key points

Food is Annex II, point 4: one sector, no subsectors.
Two filters: a food business under article 3, point (2), of Regulation (EC) No 178/2002, and engagement in the activities named, wholesale distribution and industrial production and processing.
A food business can be public or private, for profit or not, at any stage from primary production to sale; feed businesses are a separate category and are not named.
Retail, including restaurants and catering, is not named; the row has no principal-activity clause, so a retailer that is also engaged in a named activity is of the point 4 type through it.
Industrial, wholesale distribution and the effect of “and” are not defined: record your reading and check /transposition.