By Ashfak Bokhari
A CONFERENCE on halal industry`s potential in Europe will open in London on Wednesday, 10th November, and the organisers have, in recent days, been urging Pakistani entrepreneurs to avail the new market opportunities by participating in it.
The event has been organised by the World Halal Forum, a Malaysia-based organisation, and is the second such moot after the first Europe-wide conference held in The Hague in November 2009 led to a flurry of activities in the European halal markets. The UK is a key Halal market but with strong consumer views. This year`s theme is “Halal products and services â€“ going mainstream”.
The great potential of the halal sector in the UK and Europe can hardly be denied, but the fact remains that the consumers there are under-served and the issues of validity and certification remain unaddressed. In recent months, several events were organised by the promoters of halal industry, and a big trade show called Euro-Halal Market will be held in Brussels next year on November 26.
The halal industry in Europe is currently valued at about $66 billion and is expected to expand by 20 to 25 per cent in the next decade. In fact, the market size is increasing but its pace is slow because the halal food products are relatively small in number and thus the actual market remains mainly untapped. This is despite the fact that Europe has a population of 51.2 million Muslims with France having the largest chunk of 5.86 million Muslims.
The Muslim communities dominated by immigrants from Turkey, Morocco, Algeria, Tunisia, and the Middle East have faster population growth and higher household size, thus ensuring bright future for halal industry. And their buying power has also increased in recent years because of access to good jobs as a result of good education, resulting in better living standards. This has also increased their awareness of halal products.
The European halal market is, of course, still evolving. It is largely an unregulated market, full of grey areas. But it is vibrant and growing, and the WHF has a role to play in developing this market. The urge for growth in Europe can be seen in various trends. For example, in France, television advertisements and promotional billboards on halal food products have started appearing and this was strikingly visible during the preceding Ramazan.
Recent research shows that halal consumers in Europe, including non-Muslims, were willing to pay higher prices if the products were of better quality, higher safety standards and carrying halal assurance. However, the halal products have also to abide by EU regulations under which all food in the EU supply chain and market must be safe.
In a sense, halal products have already gone mainstream in the West as one can find them being processed and sold by some reputed multinationals. They include Nestle, McDonald`s, KFC, TESCO, Aussie Beef, New Zealand Lamb, Australian Lamb and Quick restaurant chain in France. Quick is offering several halal-certified meat products in eight of its restaurants.
Nestle has been producing halal-certified products in 75 out of its 481 total factories across the world. It is the biggest food company in the world that produces halal food products, with total sales generated from Muslim countries being at $3.0 billion. In 2005, Tesco UK introduced halal section in some of its outlets. By the end of 2009, the halal products sale had increased by 20 per cent. In the UK, Dominos Pizza and KFC introduced a halal menu in their outlets located in Muslim-dominated areas, and pasted halal certificates on the wall.
In Finland, McDonald`s is selling halal chicken burgers without any publicity. It buys chickens from Danish producer Danpol, who comply with Halal procedures. In the US, the Muslims have a combined spending power of an estimated $16 billion on food products. This has opened up a new market and those who are benefiting include WalMart and CostCo.
The World Halal Forum (WHF) was set up in 2006 in Malaysia. The then-prime minister Abdullah Badawi had made Halal part of his development programme which created a favourable political climate for this. Till then, there was no `halal industry` as such in the formal sense, so this was a ground-breaking event. And then there followed some interesting developments. For instance, some businessmen were really impressed and turned to halal by attending the WHF.
Another development was the decision to form an international body to create Halal standards. This resulted in the formation, over the next couple of years, of the International Halal Integrity Alliance. The IHI Alliance has taken its task seriously, and is developing standards that are ISO 45011 compliant.
In Europe, political and economic climate also determines the extent to which producers will cater to the needs of Muslim consumers, and also the extent to which the consumers feel confident to demand the kind of products and services they want. Then, there are the complexities of European politics which sometimes lead to difficult relationships with the Muslim world and their own Muslim minorities, as well as the influence of the right-wing and animal welfare groups. Hence, developing lucrative halal markets in Europe may well be a long and difficult journey.
The weakest link in the value chain is the credibility of the domestic halal certification bodies in Europe. The development of halal as an industry is, it is interesting to note, forcing the evolution of the certification process away from the religious considerations if it has to maintain its mainstream status. The multinationals cannot overlook the needs of their bulk of consumers whose choice is not based on religious considerations.
The problem is that the Muslim countries have been very slow in appreciating the significance of the halal movement. Many of them are under-developed countries and are just struggling to survive, while some of them are wealthy, oil-rich countries for whom halal is not really an issue, not a financially important one, nor a business issue. It is where the Muslim and non-Muslim worlds really interact that halal becomes an important matter. The halal is already a multi-cultural phenomenon at least in the West and the irony is that it is the non-Muslims who are mostly making halal food for the Muslim consumers across the world.