Competing Halal Standards Leave Food Industry With Indigestion

The global Halal market, estimated to be worth over $1 trillion, presents a lucrative opportunity for food companies worldwide. However, the recent controversy surrounding confectioner Cadbury in Malaysia, where traces of pork were found in its chocolates, underscores the challenges businesses face in this religiously sensitive market. One of the primary issues is the absence of a unified standard for what constitutes Halal, or permissible under Islamic law.

The Need for Unified Halal Standards

Despite efforts by Muslim authorities to establish a global Halal benchmark, food companies like Mondelez International, Nestle, and Unilever PLC grapple with a mix of national processing standards. These standards can vary significantly, even within the same country, leading to higher production costs and potential missteps in ingredient selection.

Jamil Bidin, CEO of Halal Industry Development Corporation, an agency linked to Malaysia’s government, acknowledges the confusion caused by multiple standards. Malaysia, with its established certification experience and developed industry, is often seen as a global leader in Halal food processing.

The Expanding Halal Market

The Halal market extends beyond food and drinks that do not contain any alcohol or pork. Livestock must be slaughtered in the name of Allah to be deemed Halal. With the Muslim population expected to add a billion people by 2050, major food firms are investing in Halal to tap into this fast-growing market.

According to DinarStandard, a research firm specializing in Muslim markets, the market to process, produce, and distribute Halal food and drinks will grow into a $1.6 trillion industry by 2018, up from about $1 trillion in 2012.

The Challenge of Diverse Halal Standards

The lack of global or regional benchmarks is stunting the industry’s potential. Countries like Japan and Australia are joining the Halal bandwagon to cater to a rising number of Muslim travelers. A spokesman for Cadbury’s parent firm Mondelez expressed support for a global standard, or perhaps wider regional standards, to simplify the landscape.

Halal standards are sensitive topics in Muslim countries, as Cadbury’s recent problems in Malaysia demonstrated. Several Muslim consumer groups called for a boycott of all Cadbury and Mondelez products after the health ministry detected traces of pig DNA in Dairy Milk chocolates.

The Politics of Halal Certification

The Organisation of Islamic Cooperation (OIC), which represents 57 Muslim-majority countries, is attempting to draft global Halal guidelines with the backing of Dubai, Turkey, and Saudi Arabia. However, this movement, the Standards and Metrology Institute for the Islamic Countries (SMIIC) does not include Malaysia and Indonesia, home to large Halal certification centers.

Conclusion

Defining what exactly constitutes Halal is a hotly debated issue among Islamic scholars, making the agreement on a global standard difficult. The intense rivalry between countries for a slice of the industry further complicates the search for a single standard. However, the need for unified Halal standards is clear. As the global Halal market continues to grow, a unified standard will not only simplify the landscape for food companies but also ensure the integrity of Halal products for consumers worldwide.