There are 1.8 billion Muslims globally, constituting about 20% of the world population.
The entire halal industry is estimated to be worth US$2.3tril (RM7.4tril) and includes food and beverage, pharmaceuticals, cosmetics and personal care, excluding banking.
However, several factors inhibit the trade growth of halal products, and logistics is part of the problem.
The halal status extends to the whole supply chain. Not many producers realise the importance of logistic activities, and there is a lack of the existence or use of halal-compliant logistic services. Hopefully, this scenario will change soon.
This was discussed at the 5th World Halal Forum 2010 held in Kuala Lumpur last week. The theme of the forum was State Of The Industry: Market Access And International Trade.
“A recent local trend is the halal certification of manufacturing services, and the logistics and transportation sectors,” she said.
The lack of halal standards for production processes is another issue in the industry.
According to the World Halal Forum Executive Review 2010, less than 10 out of 57 Organisation of Islamic Conference (OIC) member countries have a halal standard.
“Most countries where halal meat and poultry are produced and exported to OIC countries do not even have a halal standard. In the absence of halal labelling laws, the Muslim consumer has no legal recourse in the event of a fraud nor does he have any means of verifying the authenticity of an assurance label,” confirmed Darhim Hashim, CEO of the International Halal Integrity (IHI) Alliance, host of the World Halal Forum.
Globally, there is also a lack of mutual recognition among halal certifiers. There are almost 200 certifiers in the world but very few mutually recognise each other.
This can potentially push main buyers such as global hypermarket chains and major food companies to develop and issue their own version of halal certification. If enough major retailers do that, existing halal certifiers could be made redundant.
The most pressing issue is the lack of a single, globally-accepted standard.
According to Indonesian Irfan Sungkar, industry adviser to the World Halal Forum secretariat, Asian countries or OIC countries themselves cannot agree on a single halal standard.
For example, Turkish Muslims form the majority of the Muslim population in Germany and have little in common with the predominantly Algerian and Moroccan Muslims in France, while Britain’s Muslims are largely from Asian origins.
In Malaysia, Indonesia, Brunei and Singapore, halal certificates are issued by the government or quasi-government institutions. (Malaysia started its halal labelling regulation in 1975.)
However, in the Middle East and many other Islamic countries, consumers presume all foods are halal and place the onus on their governments.
In non-Muslim majority countries, like those in Europe, halal certification is issued by private certifying bodies, Islamic associations and even mosques.
In addition, governments of secular states like France, for example, will not intervene in halal certification, which is considered a religious matter.
“That is the biggest difference between the halal industry in Europe and Muslim majority countries,” said Dr Cedomir Nestorovic, who is associate professor, management department, at Essec Business School Paris, France. “Very few countries have single national certification bodies like Jakim in Malaysia,” said Nestorovic, who was one of the panellists at the forum.
At the inaugural World Halal Forum in 2006 held in Kuala Lumpur, non-profit organisation IHI Alliance was mandated to develop a global halal standard following a resolution made at the forum.
That mandate was further strengthened with the collaboration between IHI Alliance and the Islamic Chamber of Commerce and Industry (ICCI), which was entrusted to spearhead the global halal agenda of the OIC.
The IHI Alliance launched four modules of the ICCI-IHI Alliance Halal Standard at last week’s forum, marking a big step in the global effort to harmonise the fragmented halal industry.
The modules are Logistics, Food Services, Slaughtering and Processing, and Animal Welfare. These will form the fundamental guidelines to assist OIC member countries in setting up a properly structured domestic halal assurance body and streamline certification practices.
“First and foremost, we need to get some (syariah) parameters established from reputable religious authorities and work within those parameters,” said Darhim.
Recently, IHI Alliance also teamed up with a global testing company to work on the halal certification process.
“There also needs to be a new profession of Muslim halal auditors. In Malaysia, we have Jakim, but in other countries, they can work together with existing Islamic bodies,” he suggested. What will ensure the fruition of the global halal standard?
“There certainly must be general acceptance of the standard by Muslims at large. Then, the industry must be able to implement it. If we have a strict standard that satisfies the Muslims by and large, but one which the industry cannot use, then we’re not heading anywhere.
“We have to find a middle ground which is generally acceptable, particularly by discerning consumers who are looking for halal products and truly understand (the concept).
“These are people who are more educated and have buying power. As long as they are convinced that this is the correct system, standard and certification, then I think they will take the lead and the rest will follow,” said Darhim.
Although the development of a global halal standard by IHI Alliance is in motion, it is still in its early stages.
“We have established four modules now. If we start with logistics, which is less sensitive than say, slaughter, it’s a good starting point because that concerns the whole halal supply chain. Once we establish the links and networks, then the other standards will be easier to implement.”
Nestorovic said one problem the IHI Alliance faced was that various certification agencies do not want to co-operate or acknowledge each other.
“The fact is the work (in developing a global halal standard) by IHI is coming of age. They have visited a lot of countries and put in a lot of effort to harmonise all the different halal standards.
“We cannot say they will succeed in a few years, but they are gathering more attention and definitely more certification agencies are paying attention to them.
“In the future, maybe these agencies will adopt this standard because everyone is aware that this harmonisation is a necessity,” concluded Nestorovic.