Halal industry: It’s a ‘minefield’
THE finest brains in the Muslim world are grappling with a vexing question: how does one create a universal halal standard?
The 57-member Organisation of Islamic Cooperation (OIC), which calls itself the collective voice of the Muslim world, is trying to draft global halal guidelines with the backing of Dubai, Turkey and Saudi Arabia.
This news came to light following the furore over the recent discovery that chocolate products made by Cadbury in Malaysia tested positive for traces of pork. Fury erupted, and a boycott of Cadbury stuff was called for.
Oddly, riots did not take place, and heads did not literally roll, as one might have expected in a Muslim-majority country.
But further testing by Malaysia’s Islamic Affairs Agency, the country’s sole official halal certifier, showed that someone had made a dog’s dinner of the investigation. The initial tests had not been definitive and the chocolate was actually halal.
This latest pork panic, according to this report, threw into sharp focus the costly, religious minefield food companies must navigate as they rush to tap the surging $1 trillion global halal market.
One of the biggest headaches for corporations like Mondelez International, Nestle and Unilever PLC is the lack of a unified standard for what exactly is halal, or permissible under Islamic law, despite years of efforts by Muslim authorities to come up with a global benchmark.
As a result, global food firms face higher production costs as they must comply with a mix of national processing standards that can vary widely even within the same country.
Failing to navigate these differences leaves companies exposed to the risk of using ingredients permissible under one standard but not another.
Said Jamil Bidin, Chief Executive of the Halal Industry Development Corporation, an agency linked to Malaysia’s government:
Obviously it’s not good to have so many standards. It’s confusing.
Islam requires practicing Muslims to consume halal products, and, at its most basic, that means foods and drinks that do not contain any alcohol or pork. To be deemed halal, livestock must be slaughtered as the name of Allah is invoked.
Big food firms have been ramping up their investment and expertise in halal, eyeing a fast-growing Muslim population that is forecast to add a billion people by 2050 with rising education and income levels.
The market to process, produce and distribute halal food and drinks will grow into a $1.6 trillion industry by 2018 from about $1 trillion in 2012, according to DinarStandard, a research firm specialising in Muslim markets.
In March, for example, it was announced that fast food giant KFC is to launch a halal-only menu in eight of its London stores in a move which could be extended to other areas of the UK.
The menu, which will form part of a trial, will see the stores selling chicken products which they claim have been fully approved by the Halal Food Authority for the first time.
KFC has 720 stores across the UK, and bosses said the move was designed to ensure the company was catering to a broader range of customers, following a growing demand for halal products.
But food industry executives say the lack of global or regional benchmarks is stunting the industry’s potential at a time when countries such as Japan and Australia are jumping on the halal bandwagon to cater to a rising number of Muslim travellers.
A spokesman for Mondelez, Cadbury’s parent company in Malaysia said:
We welcome efforts to ensure consistency in halal certification and would support a global standard, or perhaps wider regional standards, to help simplify the landscape.
Defining what exactly constitutes halal is an issue of hot debate among Islamic scholars, which makes agreeing on a global standard difficult.
For example, more conservative interpretations hold that each animal must be slaughtered by a hand-held knife. Britain has two main halal certification boards with conflicting stances on whether animals can be stunned before slaughter.
The Kingdom of Brunei, which has a strict interpretation of Islamic rules, sends auditors to neighbouring Malaysian factories to check imports for halal-worthiness.
Another factor complicating the search for a single standard is the intense rivalry between countries for a slice of the industry. US cereal maker Kellogg and chocolate maker Hershey Co, for example, are building halal-compliant plants in Malaysia, with investments of $130 million and $250 million respectively.
Dubai is setting up testing and certification centres to profit from the halal business. Malaysia has been pushing its own standards, as has Turkey.
But once country determined not to be caught up in the halal frenzy is Sri Lanka. In February last year a hardline Sinhalese Buddhist group called for the abolition of the Muslim halal system of certifying foods and other goods.
The Bodu Bala Sena, or Buddhist Strength Force, also said foreign propagators of religions should leave the country within a month.
Thousands of supporters of the group attended a rally in a suburb of the capital, Colombo. The picture at the top of the page shows some protesters wearing anti-halal T-shirts.
Thousands of men and women filled the grounds of the rally and the surrounding streets at Maharagama in Colombo’s outer suburbs to hear nationalist speeches by the group’s monks.
The leaders called for a boycott of halal meat and demanded shops clear their stocks.