Globalized Halal Standard

Dr Anwar Ghani MNZM, JP

CEO New Zealand Islamic Products & Services Limited, New ZealandDirector of Export Division, NZ Natural Beef & Lamb Limited, New Zealand

Former President of FIANZ & Chairman of Halal Advisory Council, New Zealand

Outline

THE GLOBAL HALAL MARKET

Muslim Consumer

Market opportunities

FOOD SECURITY INDEX

Red meat production in OIC

WHY HALAL STANDARDS AND CERTIFICATION

CHALLENGES FOR DEVELOPING GLOBAL HALAL STANDARD (GHS)

IMPACT OF VARIABLE STANDARDS ON CONSUMERS AND

PRODUCERS

WHAT WOULD THE GHS DELIVER

CONCLUSIONS

Muslim Consumer base

• The global Muslim population was estimated to be 1.6 billion in 2010.

• It constitute 24% of the total world population

• Likely to grow to

– 27% in 2030 and

– 36% by 2070

• Asia Pacific region is home of 1 billion Muslims.

(Pew Research Centre, USA, 2015)

Muslim Consumers(Top 10 countries, Population in millions)

Countries 2010 2030

Indonesia 204.8 238.8

Pakistan 178.1 256.1

India 177.2 236.1

Bangladesh 148.6 187.5

Egypt 80.0 105.0

Nigeria 75.7 116.8

Iran 74.8 89.6

Turkey 74.6 89.1

Algeria 34.8

Morocco 32.4

Afghanistan 50.5

Iraq 48.3

Halal Markets – USD 2.4 Trillion(2012-2014)

– Food & Beverages (US$ 1.1 trillion)

– Cosmetics & Personal care (US$ 13 billion)

– Pharmaceutical (US$ 1.1 trillion)

– Apparel and Islamic Fashion (US$ 96 billion)

– Tourism and Hospitality (US$ 142 billion)

– Logistics (US$ …..??)

Food security index (The Economist, 2015)

Red meat supply in Muslim countries

Total red meat production in Muslim countries is 30% less than USA (FAO, 2010)

Muslims countries can meet less than 25% of the demand of red meat (FAO, 2010)

GCC region relies on 80% food imported from other parts of the world

Why Halal standards?

Most of the food exporting countries are not familiar with Halal protocols as they should be.

For exporting countries Halal is a market access issue

For Muslims it is a religious requirement “HalalanTayyaban”

Consumer need assurance and suppliers need to meet the consumer requirement

How many Halal standards?

• OIC• JAKIM• MUI• GCC • UAE• Muslim World League• Kuwait • Turkey• Brunei• Non-Muslim countries e.g. NZ, UK, Denmark, EU, USA,

Canada …..

Reasons for why so many standards

• Different interpretation by competent authorities.

• Muslim countries internally have to regularise Halal and protect the rights of Muslims to have access of food/products from both local producers or imported.

• Opportunities to have a slice of the Halal economy.

• Non-OIC countries want to assure importing countries that exported products meets importing countries regulatory requirement.

Challenges in Developing Globalised Halal Standard

• Lack of consistency in standardised industrial slaughter of ovine, bovine, caprine and poultry– Mechanical slaughter vs manual

– Stunning or no stunning• Ovine/Bovine/Caprine

– Captive bolt, penetrative bolt, electrical stunning, HF

• Poultry– Gassing, water bath, HF

– Animal welfare debate vs. Islamic requirements

Challenges in developing Globalised Halal Standard

• Istehala (irreversible transformation)– Use of non-Halal Gelatine

– Colouring

– Enzymes

• Inconsistencies in managing Halal Systems– How certifying bodies (HCB) are appointed

– Lack of mutual recognition of HCB by different countries

– Monitory interest vs. common good

– Lack of enough consultation between scientists and scholars

Management of Halal Certification

HCB~320

(e.g. FIANZ)

Exporting Country’s HS

(e.g. NZ)

Importing Country Authority

(e.g. JAKIM, GCC)

JAKIM

Management of Halal CertificationNZ Halal Model (Farouk et al. 2014)

Impacts of variable standards on consumers and producers

• Increases cost to consumers

• Limits access to consumers

• Reduces efficiency

• Confuses the processors & manufacturers

• Variable Halal standards makes simple and straight forward religion of Islam confusing to non-Muslim producers whose first encounter with the religion is often through Halal.

Global Halal Standard (GHS)

• We must use Quran and Sunnah as source to formulate one Global Halal Standard (GHS)

• GHS will promote consumer confidence– No room for controversies and confusion– Enhance consumer confidence– Greater efficiencies

• Reduced compliance cost• Streamline production system

– Assuming 1-5% efficiency gains means USD 11-55 billion savings in the food and beverage segment of the Halal market alone

• Good for demonstrating unity of Islam

Conclusions

• A single unified Halal standard is a way forward.

• Overall Halal certificate are recognised between Muslim countries but competitive sprit is preventing agreement on one standard.

• OIC countries should agree on one standard. Leading organisations such as JAKIM, GCC, MUI should provide leadership in making GHS as a reality.

• Whatever GHS is agreed, producers will adhere to because they cant afford to lose 25-36% of the global market for food and beverages and probably pharmaceuticals.

…Conclusions

• Having a GHS would improve food security of many of the importing countries by making food and beverages cheaper and accessible.

• Muslims must invest in research and development pertaining to Halal and convince producers that Halal is ethically and commercially a win-win system.

• The world is waiting for a unified Halal standard.

Acknowledgments

Thanks to WIEF management committee for inviting me to share my humble understanding on GHS.