Asia needs real halal standards before it can compete with the West
When you are catering to 1.8bn Muslim shoppers in a market that, according to The Economist, is likely to grow by 35% by 2030, there is bound to be a degree of fragmentation, but when it comes to halal, it is often more a case of disorganisation.
To borrow the cliché, one man’s halal is often another man’s poison because the elements that constitute what makes food halal are often governed by personal interpretations and sect mandates.
Pakistan is a fine example of this. With an overwhelmingly Muslim population in excess of 180m, a sizeable domestic food industry and a long history of debating a national halal standard, the country still struggles to make even a dent in the regional market.
Indeed, in spite of halal beef imports to the Middle East and Southeast Asia – the continent’s two biggest markets – growing by over 18% in recent years, Pakistan’s share last year accounted for less than 3% of this simply because its exports were not halal-certified.
This, however, is not through lack of hot air. In 2011, a panel of the government-backed Pakistan National Accreditation Council approved the creation of the Pakistan Halal Product Development Board to organise a means of certification. Nonetheless, the body is still to see the light of day.
Over the last five years, the country has hosted a number of high-profile international conferences and seminars to discuss ways to promote halal exports. But while these events have benefited regional rivals significantly, Pakistan isn’t even in the game because of its lack of production standards.
Moreover, the three biggest exporters of halal meat to the Middle East – Australia, Brazil and India – are not even Muslim-majority countries, and this is in spite of Pakistan’s close proximity to the region. Last year, Brazil alone shipped over 300,000 tonnes of beef products to the GCC, Egypt and Iran.
Add to this the fact that three-quarters of chickens shipped from France are halal goes a long way to explaining how coherent and formalised shari’a certification has handed non-Muslim majority countries 80% of the world’s halal industry.
Decades ago, Nestlé was one of the first Western firms to spy the potential of Islamic production, and the world’s biggest food company has since the 1980s made 20% of its factories fully halal, for products including Kit Kats and Nescafé.
It is no coincidence that Nestlé uses Malaysia as a manufacturing hub given the lengths this Southeast Asian nation has gone to to cement its place in the industry. Aside the burgeoning modern halal food parks – not just in and around the capital but across the peninsula and even in outposts like Sarawak and Kota Kinabalu – its certification is fast becoming the closest thing to an Asia-wide standard.
For example, Halal India, an independent certification body backed by the Indian government, has derived 10 halal standards from Malaysia’s single, simple and state-approved approach.
This is also paying dividends for the Southeast Asian country by attracting investment from overseas, with a high-level delegation from Qatar due to visit Sarawak this week to investigate opportunities there – and the Qataris don’t scrimp when it comes to business.
Earlier this month, a minister in Malaysia’s International Trade and Industry department has urged domestic entrepreneurs to tap deeper into the international halal market, saying the nation's annual exports of halal products worth RM30bn (US$9.6bn) pale in significance compared to the global halal market worth US$23.3tn.
"The government welcomes anyone, especially Muslims, to venture into this huge global market, they should grab the enormous opportunities available," he said here today,” stated Hamim Samuri, adding his department would provide all necessary assistance to those venturing into halal exports.
But Malaysia is not the only country with designs on ruling the Asian halal roost, and nations like Pakistan would do well to pay attention to the UAE’s announcement in May that all halal imports to the country must by next year have some form of official certification before they can be sold there.
“Each emirate has its own system to verify halal compliance at municipal level but there are no general standards and regulations. We will be putting a whole new system in place which will not only be a point of reference for firms in the UAE but also for other Islamic nations,” said Mohammed Saleh Badri, director-general of the Emirates Standardisation and Metrology Authority.
He added that Dubai’s ruler, Sheikh Mohammed, had had a “dream” to make the emirate the capital of the halal economy – and the sheikh’s dreams often do come true.
But Dubai’s desire for success in this market, just like Pakistan’s apparent failure, will eventually all boil down to standardisation. The trouble is there just doesn’t seem to have been much headway in this regard as a means to regulating Asia’s halal industry.
Have your say: As we take a week to look at Asia's halal industry, please let us know your views on the direction this segment is moving in by leaving a comment in the box below.