The halal food industry is set to grow rapidly. According to the recent 2019/20 State of the Global Islamic Economy Report, spending on halal food and beverages was projected to reach US$1.9 trillion by 2023. At the same time, the global halal food market was projected to grow to US$1.97 trillion by 2024, at a compound annual growth rate of 6.3%.
In Singapore, the rise of the halal food industry is evidenced by the growth of the country's halal certification. Statistics from Singapore's halal certification body MUIS show that in 2018 about 4,500 premises and 55,000 products were halal-certified — double the figure a decade earlier.
Many efforts by government agencies, industry bodies and enterprises have been made to capitalize on this growth and further develop the halal food industry.
One example is a dedicated halal hub, intended to enable more local halal food producers to export to the booming international market. Scheduled for completion in 2021, the hub would house halal food processing units, central kitchens, cold rooms and logistics operations, and would help halal food-and-beverage businesses source, produce, comply and distribute products.
Meanwhile, Warees Halal, together with major international events such as FHA-Food & Beverage, organized the first Halal Theatre, providing a platform for key industry players in the halal food sector to deepen their understanding of the current trends, challenges and opportunities in the halal food market.
The lack of a unified halal certification standard
Clearly, the halal food industry is booming; yet despite this, it faces a key stumbling block: the lack of a standardized regulatory framework for halal certification. Without a unified certification system, cross-border halal trade is affected, and further development of the halal food industry is hindered.
A classification allowed by a certifier in one country/region may not be allowed in another; and many of these certifiers also interpret halal food differently, adding complexity.
For example, while countries such as Malaysia, Brunei and Singapore permit the practice of stunning chicken before halal slaughter, Saudi Arabia does not. Another observed difference concerns wine vinegar: if the product is made through human intervention, Malaysia treats it as non-halal. Indonesia, on the other hand, classes wine vinegar as halal, whether produced naturally or through engineering. Such differences make the process of reaching global or even regional halal certification standards challenging.
As a result, companies operating in the halal food sector that wish to export to different markets face the challenge of higher costs, because they may need to maintain multiple production processes or certifications to meet the standards set by each importing market. This creates a bottleneck for many companies, which in turn slows halal trade.
An urgent need for collaboration and coordination
The lack of a globally unified certification standard limits the industry's potential and opportunities for further development, especially as more large food companies and non-Muslim countries increase their investment and expertise in the halal industry.
At the same time, as countries such as Indonesia introduce new regulations and certification frameworks, and as new technologies such as blockchain are increasingly trialed and tested in the halal food supply chain, the need for international coordination is only becoming more important.
With the establishment and operation of the International Halal Authority Board (IHAB) and the International Halal Accreditation Forum (IHAF), the industry is moving in the right direction. Going forward, these bodies need to work together and reach consensus on basic parameters — such as acceptable ethanol limits in flavorings, laboratory testing techniques and certification processes — to reduce halal trade barriers.
Identifying 'leaders' (whether groups, countries or certifiers) also helps drive the ongoing discussion on unifying halal certification standards globally, and sets an example for other industries.
The act of harmonizing halal certification standards is crucial to ensuring the prosperity of global halal trade, and as we enter the new year, we are optimistic about the prospects ahead.
— Dewi Hartaty Suratty, CEO of WAREES HALAL, the international certification arm of Singapore's MUIS halal certification.
FAQ
- Why does the halal food industry need harmonized certification standards?
- The halal food industry is booming, but it faces a key stumbling block: the lack of a standardized regulatory framework for halal certification. Without a unified certification system, cross-border halal trade is affected. Categories allowed by a certifier in one country may not be allowed in another, and many certifiers interpret halal differently — for example, some countries permit stunning chicken before slaughter while Saudi Arabia does not, and Malaysia treats artificially produced wine vinegar as non-halal while Indonesia classes wine vinegar as halal regardless of how it is produced. As a result, companies exporting to different markets face higher costs from maintaining multiple production processes or certifications, creating a bottleneck that slows halal trade. With bodies such as the International Halal Authority Board (IHAB) and the International Halal Accreditation Forum (IHAF) now operating, the industry is moving toward the international coordination needed — agreeing on parameters such as acceptable ethanol limits in flavorings, laboratory testing techniques and certification processes — to reduce trade barriers.