Opinion: Halal labeling: The next gold mine?


By Amanah Nurish, Yogyakarta, Indonesia

Australia is embroiled in a bribery scandal in connection with a mandatory halal certificate imposed by the Indonesian Ulema Council (MUI) for its export of meat products to the world’s largest predominantly Muslim country.

The issue is a repeat of the same old story. Back in 1998, as an impact of the “pig scare”, the formation of the Halal Certification Authority was enforced in Indonesia and the MUI was mandated to regulate halal certification. The Muslim population of more than 210 million demand all food products sold in the market be certified by the MUI, mostly for the sake of safety and religious reasons.

A food label gives assurance to people to consume market products without fear. The European vegetarian community, for example, insists that the European Vegetarian Union (EVU) label should be displayed on food products and restaurants. American Orthodox Jews demand kosher food products based on Jewish food law certified by Organized Kashrus (OK). Similarly, for Muslims, halal certification convinces them to buy products that have been prepared according to religious requirements set by Islamic teachings.

In 2001, the MUI accused a Japanese company of using a pork substance in the production of its flavor enhancer. As the fight against the product mounted, the company publicly apologized and some of its employees were arrested.

Halal labeling is inevitably the key to growing export markets in predominantly Muslim countries.

The Asia-Pacific is home to 1 billion Muslims, and Australia, together with Brazil and New Zealand, has long profited from the halal product trade in this region. More than 80 percent of Australia’s cattle exports go to the region, mostly to Indonesia.

Although Australia is not a Muslim country, it aims to meet the standard of halal requirements. Australia mandates Export Meat Orders (EMO) Part 18 under the Export Control Act 1992 to legislate halal labeling.

Johan Fischer, in his 2011 book The Halal Frontier: Muslim Consumers in a Globalized Market warns that in the contemporary Muslim world, the halal label is not merely a religious expression of what is allowed or not, but is a connection between the Muslim world and a new expanding global market of production, trade and consumption. The domestic halal certification body unavoidably acts as the gateway to enter the halal business, with a potential market of 2 billion people worldwide.

In Southeast Asia, halal certification has emerged as a potential market for industrial products and other favorable businesses.

Likewise, Pasuk Phongpaichit, a leading Thai economist, has analyzed that as an impact of social and political changes, as the new middle class in Southeast Asia, including Muslim society, has grown fast in number and influence. The Muslim Malay middle class in Malaysia rose to prominence in the 1990s as a product of Malaysia’s New Economic Policy (NEP) and the National Development Policy in 1991.

The Indonesian Muslim middle class has also been growing. The class mobility of Muslim society, especially in Indonesia and Malaysia, has turned Islam into a religion of the middle class. The rise of a Southeast Asian Muslim middle class has also led to the formation of a new “mode of consumption” and lifestyle.

With a promising number of more than 400 million Muslim consumers in Southeast Asia alone, ASEAN has prepared a common ASEAN halal logo as an identification that the products come from ASEAN accredited food-processing plants (ASEAN, 1998). Halal products are now beyond traditional religious requirements on red meat and finance, but comprise a huge global market worth US$2.3 trillion.

Pursuant to the Muslim market’s demand, the halal label has expanded to the degree that it is not only limited to industrial products, but also halal services.

As the ASEAN Economic Community (AEC) comes into effect late in 2015, halal holidays will be roaring in the regional market.

Thailand, for example, expects Phuket to be the next growing tourist sector with the arrival of more Muslim tourists through Andaman halal-labeled tours. Malaysia is in the process of tapping the Muslim tourism market by enhancing hotels and resorts with halal certified kitchens, with the aim of making Muslim tourists “feel at home”. Last year, Singapore released a special travel guide for Muslim travelers: a Muslim-friendly-map that accommodates the need for halal products.

The worldwide food industry is paying attention to detail to fulfill Muslim halal requirements by avoiding some substances or ingredients. Japan, which enthusiastically envisions ASEAN as a chief market of growth in the tourist sector, has intentionally improved its hospitality to Southeast Asian Muslim visitors by increasing the number of restaurants serving halal certified food and by giving spaces for prayers.

Muslims, by population, are the next vast consumer group and it is understandable that many companies and industries have decided to have their products certified as halal by various Muslim organizations.

A new gold mine has been discovered. The next challenge, with the increase of global trade in the upcoming AEC, is for Indonesian halal certification to go in harmony with regional, if not global, standards.

Nevertheless, apart from certifying the reliability of Islamic procedure-based products, halal certification is much more about the responsibility to protect the interest of both the industry and consumers.

For Muslims, halal certification in the global market will lead to religious and social transformation in the future.


The writer, a PhD candidate at the Indonesian Consortium for Religious Studies (ICRS), Gadjah Mada University (UGM), Yogyakarta, is a researcher of halal foods in Southeast Asia.