KUALA LUMPUR, Malaysia (Reuters) — The storm of bad publicity that hit Cadbury after its chocolates tested positive in Malaysia for traces of pork highlights the costly, religious minefield that food companies must navigate as they rush to tap the surging $1 trillion global halal market.
One of the biggest headaches for food companies is the lack of a unified standard for what exactly is halal, or permissible under Islamic law.
The uncertainty remains after years of efforts by Muslim authorities to come up with a global benchmark.
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As a result, global food firms face higher production costs as they struggle to comply with a mix of national processing standards that can vary widely even within the same country.
Failing to navigate these differences leaves companies exposed to the risk of using ingredients permissible under one standard but not another.
“Obviously, it’s not good to have so many standards. It’s confusing,” said Jamil Bidin, chief executive of the Halal Industry Development Corp., which is linked to the Malaysian government.
Malaysia, whose population is largely Muslim, is regarded by many Muslim countries as a global leader in halal food processing because of its established certification experience and developed industry.
Islam requires practicing Muslims to consume halal products, and, at its most basic, that means food and drink that do not contain alcohol and pork. To be deemed halal, livestock must be slaughtered as the name of Allah is invoked.
Big food firms have been increasing their investment and expertise in halal as they eye a fast-growing Muslim population that is forecast to add a billion people by 2050 with rising education and income levels.
The market to process, produce and distribute halal food and drink will grow into a $1.6 trillion industry by 2018 from about $1 trillion in 2012, according to DinarStandard, a research firm specializing in Muslim markets.
However, industry executives say the lack of global or regional benchmarks is stunting the industry’s potential at a time when countries such as Japan and Australia are jumping on the halal bandwagon to cater to an increasing number of Muslim travellers.
“We welcome efforts to ensure consistency in halal certification and would support a global standard, or perhaps wider regional standards, to help simplify the landscape,” said a spokesperson for Cadbury’s parent firm, Mondelez.
Halal standards are emotive topics in Muslim countries, as Cadbury’s recent problems in Malaysia showed.
Several Muslim consumer groups called for a boycott of all Cadbury and Mondelez products after the health ministry said it had detected traces of pig DNA in Dairy Milk chocolates.
The news generated an online furor and prompted several rounds of testing by authorities from countries such as neighbouring Indonesia, home to the world’s biggest Muslim population, and Saudi Arabia, the birthplace of Islam.
Further testing by Malaysia’s Islamic affairs agency, the country’s sole official halal certifier, showed that the initial tests had not been definitive and the chocolate was actually halal.
However, the incident has sparked a heated debate among Islamic scholars in Malaysia over whether substances derived from pork such as gelatin can be considered halal.
“We expect there wouldn’t be a repeat of such an incident as this could ruin the halal industry, in Malaysia especially,” said Othman Yusuf, chair of the Federation of Malaysian Manufacturers’ halal committee.
Domestic politics and vested interests have also proved to be a stumbling block.
The 57-member Organization of Islamic Co-operation (OIC), which calls itself the collective voice of the Muslim world, is trying to draft global halal guidelines with the backing of Dubai, Turkey and Saudi Arabia.
However, that movement, called the Standards and Metrology Institute for the Islamic Countries, does not include Malaysia and Indonesia, which are home to large halal certification centres.
“What is critical is that there is interoperability among standards, and transparency,” said Rafi-uddin Shikoh, chief executive officer of the New York-based consulting company DinarStandard.
“An exporter intending to export food from Sudan should know and deliver easily the halal certification requirements from almost any market they feel they can grow in.”
Defining what exactly constitutes halal is an issue of hot debate among Islamic scholars, which makes agreeing on a global standard difficult.
For example, more conservative interpretations hold that each animal must be slaughtered by a hand-held knife. Britain has two main halal certification boards with conflicting stances on whether animals can be stunned before slaughter.
Brunei, which has a strict interpretation of Islamic rules, sends auditors to neighbouring Malaysian factories to check imports for halal-worthiness. The intense rivalry between countries for a slice of the industry also complicates the search for a single standard.
For example, U.S. cereal maker Kellogg Co. and chocolate maker Hershey Co. are building halal-compliant plants in Malaysia, with investments of $130 million and $250 million, respectively.
Dubai is setting up testing and certification centres to profit from the halal business. Malaysia has been pushing its own standards, as has Turkey.
“It’s silos,” said Darhim Hashim, director of the International Halal Integrity Alliance, which is working with the OIC to create common standards. He said one way forward would be for the Gulf countries, Malaysia and Indonesia to agree on minimum standards.
“I think naturally the rest would follow. Those are the key markets, the most regulated import markets.”
- In 1990, ISNA Canada was officially appointed by the Government of Malaysia to issue Halal Certificates. ISNA supervises the certification process.
- Meat from pigs is not allowed, so there is no such thing as halal pork. Halal meat must never come into contact with pig meat.
- Blood is considered harmful to consume so meat must be completely drained of blood.
- Halal food cannot be prepared with alcohol of any kind or include alcohol in sauces.
- Allah’s name must be pronounced during the slaughter process as thanks for the meat.
- Dhabiha is the name for the halal method of slaughter, which requires that animals are killed with a swift incision to the throat from a razor sharp blade. Animals about to be slaughtered are turned to face Mecca, the name of Allah is spoken and then the throat is cut and the blood drained from the carcass. Some consider the method to be less stressful and painful to the animal than modern western methods of slaughter.
