Halal FAQs for F&B Exporters July 2017

Transcription

1 Halal FAQs for F&B Exporters July Understanding Halal What is Halal? Halal food is that which adheres to Islamic law (Shari ah), as defined in the Quran. The word halal means permissible and lawful. The antonym for halal is haram, which means unlawful or forbidden. Muslims are not allowed to eat foods explicitly prohibited in Islam. These include alcohol; pig meat; meat or any products from a forbidden animal; meat or any products of an animal which has not been slaughtered in the correct manner. The Islamic form of slaughtering animals or poultry, dhabiha, involves killing through a cut to the jugular vein, carotid artery and windpipe. Animals must be alive and healthy at the time of slaughter and all blood is drained from the carcass. From a producer s perspective, these concepts are important to remember. Not only must the ingredient be reviewed for permissibility, but also suppliers of the ingredient must be approved as halal. This is because many ingredients may be from a variety of sources. A company does not have to be owned, run or operated by Muslims to produce halal products. However, any product destined for halal labelling must be produced under the strict supervision, assistance, counsel and participation of trained and competent Muslim production inspectors. It is the company s responsibility to find trained Muslim inspectors and to comply with the requirements. It is the marketer s responsibility to assure the reputation of the Muslim supervising organization contracted to do the certification (J&M Food Products Company, 2000). What is Tayyib? The Quran has many verses that encourage Muslims to eat food that is halal and Tayyib (Quran chapter 2 verse 168). Tayyib (pure) means wholesome and ethical, but more than that it encompasses the spiritual and physical purity of food. The move towards Tayyib is in harmony with broader global ecoethical movements relating to health, well-being, ecology, sustainability and fair trade. Tayyib speaks to the whole supply chain of the product and includes elements such as the type of fertiliser used, the treatment of labour, environmental concerns etc. Within the context of the Halal market, these eco-ethical values have demonstrable market value within the food sector. Due to the high quality encouraged by Tayyib many non-muslims demand this food too. There are also cross-over opportunities with the growing organic food sector and tayyib products as people become more interested in the supply chain and tracing elements of their food globally.

2 What is Halal Certification? Halal certification means that food has been subjected to an approved certification system which guarantees to consumers that nothing in the food has any forbidden components. Halal certificates are issued, for a fee, by a certifying body. Finding and hiring a reputable Halal supervisory organization and properly trained on-site Halal inspectors and supervisors are very important. 2. Why is Halal a Priority for the Western Cape The Western Cape Government aims to promote economic growth and job creation. Through strategic intervention, the Western Cape Department of Economic Development and Tourism (DEDAT) is putting in place a set of high priority, practical projects to unlock opportunities in sectors where the Western Cape has a clear but unrealised competitive advantage. The priority sectors chosen are highlighted under Project Khulisa, which, translated from isixhosa, means Project Grow. In the first phase of Project Khulisa, which runs until 2019, the Western Cape Government is focusing on three areas, namely, tourism, agri-processing and the oil and gas sector. Within the agri-processing sector halal products are a major priority to stimulate growth. In order to promote this subsector, a Halal Park initiative is being investigated and halal exports are being promoted. In essence there are great export opportunities for halal products that link to the Western Cape s strategy to become a forerunner in halal product manufacturing, processing and packaging. MEC Winde has mentioned specifically that African demand for halal products alone was estimated at $50 billion, but that only $36bn of halalbranded products are going into that market, so there s the demand, but not the supply. Wesgro is currently involved in growing the exports of halal products from the Western Cape as can be shown from the success of a trade mission to Senegal in 201 which secured R100 million worth of trade. 2 The Value Proposition Ensuring that your food products are halal not only makes them accessible to the local Muslim population but also globally. Islam is the world s fastest growing religion, and Muslims have the highest birth rate of any religious grouping. One of the strongest drivers for the continued growth of the Islamic economy sectors is the fast growing, young, and large Muslim population worldwide. The global Muslim population is expected to rise from 1. billion in 2014 to 2.2 billion by 2030 (26.4 percent), according to Pew Research Center s Forum on Religion & Public Life.

3 It is estimated that 60% of Muslims are under the age of 30. Spread out in 56 Muslim majority countries, the Muslim population has a GDP of around USD6,trn. The Global Islamic Economy Report (201) estimates that around USD1,1 trn was spent on halal food and beverages in 2015 and this is estimated to increase to USD1.9trn by Source: Global Islamic Economy Report 201 The Global Islamic Economy Report (201) found that halal food faces the strongest opportunities in healthy products and halal ingredients, with sector development still held back by a lack of standardization i.e. the lack of global Halal brands. 3. The Steps for a Non-halal Company to Become Halal In order to ensure that a product is marketable as halal one need to follow all the halal requirements. Some products are naturally halal such as fruit, eggs and vegetables but the processing and packaging of these goods must not contaminate the food in any way. Processed foods particularly must not contain animal by-products or other haram ingredients that are forbidden. All the suppliers, locally or internationally, including imports and by-products must be halal certified by an halal certifying authority. All additional ingredients, like supplements, food additives, flavourings, emulsions, enzymes, colouring, stabilizers, sweeteners, preservatives, as well as purification or cleansing agents must be pre-approved for incorporating it into the halal certified product. EXAMPLES OF HALAL AND HARAM FOOD HALAL HARAM All fruit and vegetables Alcohol and products containing or made from Alcohol e.g. some vanilla extract, some vinegars

4 EXAMPLES OF HALAL AND HARAM FOOD HALAL HARAM All fish but not all shellfish; not frogs, crocodiles and sharks Pig and any products containing pig Cows, sheep, lamb, chickens, hens, turkey, ducks, camels, goats, goose, ostrich, etc if they are slaughtered in the halal way Narcotics, heroin, cocaine, marijuana and any other substances which causes intoxication Eggs (chicken) Any animal that has died (except fish and sea creatures) before being slaughtered in the Islamic manner Grain products such as rice, pasta or bread All birds which have talons and carnivores with fangs Gelatin and shortenings made from pigs Blood Source: Muslimconverts.com, 201 Once you have researched that your product is made with halal ingredients, the next step is to certify your products as halal for the domestic and international market. A halal certificate is a guarantee that products comply with the Islamic dietary requirements. The next section will look at the certification authorities in South Africa and the services that they offer. Selected South African Certification Authorities 4 Once you have applied for halal certification, an Initial inspection & assessment of the facility will be conducted by an official. The applicant will have to comply with any adjustments, changes or additions to the facility in order to render it conducive for halal compliance. There must be no exchange or mixing of commodities, crockery, cutlery, cooking utensils and equipment in the halal and non-halal sections, whether in preparation, production, processing, collection, washing/cleaning, drying, receiving, or storing. The table below shows a list of selected South African halal certifying bodies, their contact details, estimated fees for exporters and international markets that are not compatible with certain certifiers. SELECTED SOUTH AFRICAN HALAL CERTIFYING BODIES NAME WEBSITE INTERNATIONAL MARKETS THAT PRESENTLY DON T RECOGNISE THE CERTIFICATION ESTIMATED FEES CONTACT Malaysia UAE +/- 3c per kg info@mjchalaltrust.co.za Muslim Judicial Council (MJC) In the process of registering with the UAE

5 SELECTED SOUTH AFRICAN HALAL CERTIFYING BODIES NAME WEBSITE INTERNATIONAL MARKETS THAT PRESENTLY DON T RECOGNISE THE CERTIFICATION ESTIMATED FEES CONTACT National Independent Halal Trust (NIHT) Waiting on a Gulf Accreditation visit with ESMA (UAE) Between ZAR ZAR per annum nihtcpt@halal.org.za Pending Registrations: ESMA (UAE) and Indonesia. Recognised in all other countries of the world including government Halal regulatory bodies such as Malaysia, Singapore, Philippines, Thailand, Kuwait, Bahrain, Qatar, Turkey, Oman, Jordan, Brunei, Egypt etc. Application, Registration, Raw Material Evaluation, Admin and Legal Once-off costs: Local Certification Scheme (LCS): R Global Certification Scheme (GCS): R Note: For GCS an additional Audit cost of R1000 per Man hour. Western Cape: Tel: applications-cpt@sanha.org.za Contact Person: Shareef/ Marzuq Kwa Zulu Natal: Tel: applications-kzn@sanha.org.za Contact Person: Mehmood/ Haamid Gauteng & all other provinces: Tel: applications@sanha.org.za Contact person: M. Ameen/ Reza South African National Halal Authority (SANHA) Ongoing Licensing fees for both schemes: These charges are not product/ quantity specific but rather site specific. i.e. a monthly/ annual licensing fee is applicable per site. 5 Where third parties wish to export already certified product, a Halal export certificate admin fee is applicable per consignment. Travel costs as applicable: Road: R Km from nearest regional SANHA office. Airfare: Economy fare for a minimum of two / maximum three auditors. Currently not registered with any international certification bodies. N/A or info@shura.org.za SHURA Mainly a local certifier but looking to expand in the future Islamic Council of South Africa (ICSA) a.co.za Malaysia UAE Between R5000-R000 industry dependant operations@icsahalal.co.za Source: various halal certifying authorities, 201 Disclaimer: this information has been provided by the respective certification authorities, please check this information with the relevant parties before choosing a certifying agent.

6 Companies can also certify their products directly with countries or international certifying agencies that are recognised in other countries. For example, many of the South African certifiers are not recognised in the UAE, however companies can export to the UAE, parallel to the accreditation process for the certification bodies in South Africa. Companies can make use of certification bodies in the EU or Australia that are accredited to ESMA, to approve and certify slaughtering facilities and the production facility that they can use to enter the UAE market. Once the South African certification body has been accredited then the supervisor can be changed with notification to ESMA. Select country specific certifiers of major Muslim countries include: SELECTED COUNTRY SPECIFIC HALAL CERTIFYING BODIES NAME COUNTRY WEBSITE DETAILS ESTIMATED FEES Application fee charged by Jakim office estimated at :- RM800 Annual sales is within RM 500,000 to RM 25 million and total workers are within 50 to 150 peoples; Jakim Malaysia JAKIM Halal Certificate is valid for every 2 years and can be renewed for 4 years extension in future if having proven good record RM1,600 Annual sales more than RM 25 million, multinational company and total workers are more than 150 peoples Fee Charges 6 (DangangHalal.com) ESMA UAE n-us - 10 products it will cost around $8,000 to be certified, as per the UAE.S Indonesian Ulema Council (MUI) - halal certificate The Halal Law requires all products that meet the halal requirements and enter, are circulated, or sold within Indonesia to be halal certified by October 1, 2019 Food and Drug Monitoring Agency (BPOM) - halal logo From Halal Products Certification Agency (Badan Penyelenggara Jaminan Produk, BPJPH) Indonesia The Halal Law mandates the Government to establish a new agency, the Halal Product Assurance Agency (Badan Penyelenggara Jaminan Produk Halal BPJPH ) within three years after promulgation of the law. Halal certificates are valid for four years and subject to extension. Fees will range from 430,000 Indonesian rupiah ($32) to 4.3 million rupiah, reported-the Jakarta Post Sources: respective certifying bodies, 201

7 International certifiers such as the Halal World Institute are also available. In order to promote and expand Halal culture, the Halal World Institute was established in 200. Their website also offers more information on halal standards and regulations: 4. Wesgro Strategic Markets for Halal 201 Wesgro have chosen strategic halal markets for 201, namely, China Malaysia Nigeria Senegal Thailand UAE Market intelligence and research has shown that these markets selected offer the greatest immediate potential and demand for Western Cape products. These markets also offer Western Cape companies preferential access into the markets / supermarkets through Wesgro networks. Wesgro has also established solid government and business channels in these markets. These markets will be reviewed and extended into the future, however, the chosen markets offer greater access at the moment for companies working with Wesgro. The table below shows some economic indicators for the selected countries. It shows that while China has the highest population of 1.38bn people, Thailand has the lowest inflation rate of 1.5% and Singapore has the highest GDP per capita PPP with 8,855 international dollars. GROSS DOMESTIC PRODUCT BASED ON PURCHASING-POWER-PARITY (PPP) PER CAPITA GDP MARKET POPULATION (MILLION) INFLATION (2016) 2016 GDP PER 2016 GDP PPP CAPITA PPP (INTERNATIONAL (INTERNATIONAL DOLLARS) DOLLARS)* Senegal , Nigeria , , Malaysia , Singapore , Thailand , , China 1, , , UAE , Source: IMF, 201 *GDP per capita is a measure of GDP per person per year The graph below shows GDP growth over time, from 2005 and forecast into Senegal s growth is said to outpace China s from 201 onwards, however, this is from a lower base. Senegalese GDP in 2016 is recorded at 39.bn international dollars (I$) PPP, whereas China s GDP PPP is 532 times that figure at I$21291bn.

8 GDP (% change) GDP GROWTH, f 2018f 2019f 2020f 2021f 2022f Senegal China Malaysia United Arab Emirates Thailand Singapore Nigeria Source: IMF, 201 Global imports of Food and Beverages from Priority Markets The graph below shows select markets global imports of food and beverages from 2009 to Imports are currently the highest to China, worth USD95.8bn, followed by the UAE with around one seventh of China s imports, USD14bn and the third largest market is Malaysia with USD13bn worth of imports. China, however, has the lowest Muslim population of the selected markets of around 1.6% followed by Thailand with 5.8%. 8

9 Value (USDm) SELECT MARKETS GLOBAL F&B IMPORTS, China UAE Malaysia Thailand Singapore Nigeria Senegal South African Exports of Food and Beverages to Priority Markets 9 The graph below shows South African exports of food and beverages to the selected markets from 2009 to Exports are currently the highest to the UAE, worth USD286.m, followed by China with less than half of UAE exports, USD123.5m and the third largest market is Malaysia worth USD102m.

10 Value (USDm) SOUTH AFRICAN EXPORTS OF F&B TO SELECTED MARKETS, UAE China Malaysia Singapore Nigeria Senegal Thailand South Africa s Top Food and Beverage Exports to Each of the Selected Markets, The tables below show the top 10 food and beverage exports from South Africa to strategic markets, their value in 2016 and their ad valorem tariff. In the tables below the following products would need certification: meat products, fish, molluscs, waters, prepared or preserved products, sauces, juices and chocolates. SOUTH AFRICAN F&B EXPORTS TO UAE 2016 RANK PRODUCT* VALUE (USDm) AD VALOREM TARIFF 1 Citrus fruit Apples, pears and quinces Fresh stone fruit Meat of bovine animals, fresh or chilled Grapes Waters, incl. mineral waters and aerated waters, containing added sugar or other sweetening Prepared or preserved meat or offal (excluding sausages) Sauce and preparations therefor; mixed condiments and mixed seasonings Fresh berries Prepared or preserved fruits, nuts and other edible parts of plants *non-halal products have been excluded Muslims only eat halal food, however non-muslims can eat halal food and in China the halal certification is also perceived as a mark of higher quality food and beverages by the non-muslim consumer. In both China and the UAE citrus fruit is the largest export product.

11 SOUTH AFRICAN F&B EXPORTS TO CHINA 2016 RANK PRODUCT* VALUE (USDm) AD VALOREM TARIFF 1 Citrus fruit Fruits, nuts and other edible parts of plants, prepared or preserved, Crustaceans** Grapes Other nuts, fresh or dried, whether or not shelled or peeled Maize or corn*** Locust beans, seaweeds and other algae, sugar beet and sugar cane, Fruit juices, incl. grape must, and vegetable juices Frozen fish excluding fish fillets Apples, pears and quinces, fresh *non-halal products have been excluded **crustaceans have been included as some muslim groups eat crustaceans ***the majority of the exported maize is likely to be GMO and therefore not halal, however there is currently no way to distinguish GMO from non-gmo in the trade data In order to export to Malaysia, the halal certification has to be recognised with the Jakim group. In South Africa, only the NIHT and SANHA certification covers exports to Malaysia. The highest tariff on exports to Malaysia are for fresh berries with 1%. SOUTH AFRICAN F&B EXPORTS TO MALAYSIA 2016 RANK PRODUCT* VALUE (USDm) AD VALOREM TARIFF 1 Apples, pears and quinces Citrus fruit Grapes Sauce and preparations therefor; mixed condiments and mixed seasonings 5 Fresh stone fruit Fresh berries Prepared or preserved fruits, nuts and other edible parts of plants 0 8 Frozen fish (excluding fish fillets) Molluscs Other nuts, fresh or dried, whether or not shelled or peeled (excluding coconuts, Brazil nuts) 0 *non-halal products have been excluded 11 Singapore and Senegal are the only countries where chocolate and cocoa containing sweets are in the top 10 food and beverage exports from South Africa. The ad valorem tariffs for Singapore were unavailable at the time of publication so the HS codes have been given in their place in the last column. SOUTH AFRICAN F&B EXPORTS TO SINGAPORE 2016 RANK PRODUCT* VALUE (USDm) HS CODES** 1 Apples, pears and quinces ' Citrus fruit 12.9 ' Prepared or preserved fruits, nuts and other 5.86 edible parts of plants ' Grapes 5.52 ' Frozen fish (excluding fish fillets) 3.51 '0303 Prepared or preserved crustaceans, molluscs and other aquatic invertebrates (excluding smoked)*** '1605 Molluscs 1.54 '030

12 SOUTH AFRICAN F&B EXPORTS TO SINGAPORE 2016 RANK PRODUCT* VALUE (USDm) HS CODES** Waters, incl. mineral waters and aerated 8 waters, containing added sugar or other sweetening Fruit juices, incl. grape must, and vegetable 9 juices, unfermented, not containing added spirit Chocolate and other food preparations 10 containing cocoa *non-halal products have been excluded ** ad valorem tariffs unavailable at time of publication ***crustaceans have been included as some muslim groups eat crustaceans '2202 '2009 '1806 Nigeria and Senegal are the selected halal markets for Africa. Top exports that are unique to Nigeria are other food preparations, not elsewhere specified and soups and broths, other sugars and starches. SOUTH AFRICAN F&B EXPORTS TO NIGERIA 2016 RANK PRODUCT VALUE (USDm) AD VALOREM TARIFF 1 Apples, pears and quinces Other food preparations Grapes Fruit juices, incl. grape must, and vegetable juices, unfermented, not containing added spirit Sauce and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal Soups and broths and preparations therefor; homogenised composite food preparations Other sugars, incl. chemically pure lactose, 8 maltose, glucose and fructose Sugar confectionery not containing cocoa, incl. white chocolate Starches; inulin Meat of bovine animals, frozen *non-halal products have been excluded 12 The largest tariff on top South African food and beverage exports to Senegal was seen for edible poultry and chocolate and food preparations with cocoa each at 35%. SOUTH AFRICAN F&B EXPORTS TO SENEGAL 2016 RANK PRODUCT VALUE (USDm) AD VALOREM TARIFF 1 Apples, pears and quinces Citrus fruit Grapes Fruit juices, incl. grape must, and vegetable juices, unfermented, not containing added spirit Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots Maize** Fresh stone fruit Chocolate and other food preparations containing cocoa Meat and edible offal of fowls of the species Gallus domesticus, ducks, geese, turkeys Waters, incl. mineral waters and aerated 10 waters, containing added sugar or other sweetening

13 *non-halal products have been excluded **the majority of the exported maize is likely to be GMO and therefore not halal, however there is currently no way to distinguish GMO from non-gmo in the trade data Thailand imposes the highest tariff on citrus exports from South Africa at a high 11%, this is followed by prepared or preserved fruits and nuts at 44% and grapes at 39%. SOUTH AFRICAN F&B EXPORTS TO THAILAND 2016 RANK PRODUCT VALUE (USDm) AD VALOREM TARIFF 1 Maize or corn** Citrus fruit Fruits, nuts and other edible parts of plants, prepared or preserved, whether or not containing 44 4 Molluscs Grapes, fresh or dried Fats and oils and their fractions of fish or 0.28 marine mammals, whether or not refined 10 Other nuts, fresh or dried (excluding coconuts, Brazil nuts) 11 8 Sauce and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal 9 9 Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by 0.0 cooking Fruit juices, incl. grape must, and vegetable juices, unfermented, not containing added 0.04 spirit 22 *non-halal products have been excluded **the majority of the exported maize is likely to be GMO and therefore not halal, however there is currently no way to distinguish GMO from non-gmo in the trade data 13 Wesgro has taken every effort to ensure that the information in this publication is accurate. We provide said information without representation or warranty whatsoever, whether expressed or implied. It is the responsibility of users of this publication to satisfy themselves of the accuracy of information contained herein. Wesgro cannot be held responsible for the contents of the publication in any way. For more information on this publication and other Wesgro publications please contact research@wesgro.co.za or for more publications visit the Wesgro publications portal on our website at Wesgro, 201.