According to statistics in the State of the Global Islamic Economy Report 2017/2018 published by Reuters, global spending across the sectors of the Islamic economy was estimated at about US$3.2 trillion in 2017. In 2014, global spending on the Halal food industry alone had reached US$1.28 trillion, and by 2020 spending was expected to grow to US$1.585 trillion. Global spending in other areas of life—such as travel, fashion, media, entertainment, pharmaceuticals and cosmetics—was estimated at US$1.8 trillion in 2014 and was expected to grow steadily to US$2.6 trillion by 2020.
Standardization is also expected to increase investor interest. So far, investor interest has been limited because the enterprises themselves are limited in scale. Now the business is growing, and with the support of proper Halal food standards and programs, both the supply and demand sides will attract more capital, helping Halal food compete with comparable non-Halal food.
Different Halal standards and Halal programs around the world cause confusion among manufacturers and exporters.
Although the Islamic economy is considered an excellent opportunity to promote Halal trade, the Halal industry and Halal-based businesses globally, it faces structural and operational challenges in regulation, standardization, compliance, supply chain integrity, R&D and consumer education. Regulatory and standardization challenges are among the most impactful, because they greatly affect trade between countries.
Importing Halal products and services into Muslim countries has become a considerable business, as well as an opportunity for manufacturers and exporters to enter this rapidly growing market segment. This requires proper Halal certificates and Halal marks to ensure compliance with the specific Halal requirements set by each country/region.
In the current state, each country has its own regulations, standards, Halal programs and Halal conformity assessment practices. Because there are many bodies engaged in Halal certification work, obtaining a proper Halal certificate may be questioned; therefore, due to the adoption of different standards and programs, there is confusion among manufacturers and exporters: which requirements should they comply with? Why is a product accepted as 'Halal food' in one country but not in another? This situation has also led to more than a hundred Halal marks currently being used worldwide, extending this confusion to consumers of Halal products: which Halal mark is correct? Is the product declared to be Halal food? Is it really Halal? Ultimately, this becomes an obstacle to the growth of the Halal market.
In addition, manufacturers and exporters find themselves having to comply with various different requirements, taking into account the associated financial implications, which are ultimately passed on to consumers who must pay higher prices for Halal products and services.
Therefore, there is a need to establish unified Halal standards in each sector, simplify the certification process between different countries, and establish unified Halal conformity assessment practices.
IHAF's role in developing unified Halal standards
IHAF's ultimate mission is to unify Halal food standards and Halal food conformity assessment practices, and to reach a global agreement among authorities to simplify the circulation of Halal food between countries and build a Halal food market that consumers can trust. Therefore, to overcome the challenge of the lack of unified Halal standards and unified conformity assessment practices in the Halal field, IHAF, through the work of its Technical Affairs Committee, is establishing unified standards for Halal certification bodies and unified standards for all Halal programs. The published Halal standard documents should reduce the challenges associated with unified standards and practices in this field, and should become the basis for the IHAF peer evaluation process and mutual recognition among its members.
One of IHAF's main goals is to ensure unified standards, integrity and transparency in Halal certification programs. Reliable dependence and the desire for the rapid expansion of the Halal market are driving many countries to adopt unified Halal practices, reflected in IHAF's growing membership. Countries with unified certification practices have a clear competitive advantage in the global market, especially in terms of reliability and cost, and are in a better position to expand their global influence.
It is worth mentioning here that IHAF promotes mutual recognition among member accreditation bodies to enhance international trade in the Halal field and to ensure the interests of governments and regulators.