ASEAN Economic Community to help grow Halal sector

Prime Sarmiento – The Brunei Times

THE establishment of the ASEAN Economic Community (AEC) will develop the halal food industry in the region as it will help manufacturers meet the growing demand in Southeast Asia, according to a recent report published by Euromonitor International.

“The launch of the ASEAN Economic Community in 2015 is an opportunity for imagesbusinesses to arm themselves with proper compliance and certification to secure their place in this vibrant food space,” Euromonitor said in its report entitled Doing Business in the Halal Market: Products, Trends and Growth Opportunities.

Euromonitor said Southeast Asia has become “a goldmine” for businesses catering to the region’s huge Muslim population. These businesses include the halal packaged food industry, which Euromonitor said has grown by 10 per cent in 2014 thanks to the Southeast Asian consumers’ higher discretionary income and growing awareness of health and wellness issues.

“The middle class is also expanding, so more Muslims are gaining interest in global food trends, cuisines and innovation. Hence as purchasing power increases and packaged food trends become more advanced globally, the demand for halal packaged food within the ASEAN region tends to develop at a faster pace,” Emil Fazira Kamari, research analyst at Euromonitor International in Singapore, said in an interview with The Brunei Times.

She said the AEC will ease intra-regional trade which will help halal food manufacturers to enter developing markets in the region.

But AEC will also encourage competition among manufacturers wanting to get a share of a growing market. This, Emil Fazira said, will encourage companies to secure halal certification, as products with halal certification “will appeal to Muslim consumers more than other non-certified products”.

“The security of certification depends a lot on the country’s Islamic eco-system and if the certification bodies are strong and clearly guided,” she said.

The need for certification is crucial as the Euromonitor report notes that logistics and reliability of food sources remain a challenge for halal products.

“With imitation products and the black market still going strong, there are many gaps especially higher up the supply chain where the purity of ingredients cannot be closely monitored by certification agencies or end businesses,” Euromonitor said in its report.

Euromonitor cited Mondelez International Inc, which suffered a setback in 2014 when DNA traces of pork were incorrectly found in two lines of its halal Cadbury Dairy Milk chocolate tablets under its subsidiary Mondelez (M) Sales Sdn Bhd.

Euromonitor said the controversy has pushed Muslim consumers to question the reliability of the brand and forced the company to employ fresh marketing strategies to reassure its customers of the products’ quality.

Eurominotor said companies’ compliance to halal standards can be strictly monitored if many parts of the production chain are localised.

“Increasing focus on self-sufficiency to maintain food security strengthens the country’s production capabilities, thus reducing the need to outsource halal packaged food,” Euromonitor said.

Euromonitor said Southeast Asian countries like Singapore and Malaysia have established in-country halal eco-system with the support of their respective governments.

The Brunei Times