POTENTIAL AND OPPORTUNITIES OF HALAL TRADE IN THE MIDDLE EAST. Assoc. Prof. Hjh. Mariam Abdul Latif Universiti Malaysia Sabah
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1 POTENTIAL AND OPPORTUNITIES OF HALAL TRADE IN THE MIDDLE EAST Assoc. Prof. Hjh. Mariam Abdul Latif Universiti Malaysia Sabah First Halal Workshop 11 May, 2014 Kuwait Institute for Scientific Research, State of Kuwait رص ارة ال ا ا رق اوط د. مريم عبداللطيف أستاذ مشارك نظم إدارة الا غذية الحلال كلية علوم الغذاء والتغذية جامعة ماليزيا صباح ماليزيا ورال او اثا دوا
2 Content Introduction Market Potential Market Opportunities Proposed Collaboration Summary Introduction Halal trade refers to buying and selling of halal products and services involving transfer or exchange of such products and services for money or money's worth. The manufacturers produce the halal products, then the products are distributed to the wholesaler, who in turn distribute them to the retailers which finally reach the consumers. Internal Trade: Wholesale Retail External Trade: Export Import Entreport Halal food products ~ USD 548 billion Global Halal Market ~ USD 2.1 trillion 4
3 World Muslim Population 23% of world s population are Muslims (World Bank 2013) World Muslim Population World Muslim Population Muslim Population is increasing at the rate of 1.84% (by Carniege Endowment for International Peace). The world Muslim population in 2009 is estimated at billion Continent World Population 2008 Muslim Population Muslims by (%) Africa Asia 4, , Europe North America South America Oceania Total 6, M 1, M 24 % Source: Pop. Data CIA World Factbook 6
4 Components of Halal Industry FOOD SERVICES (Examples: Logistics, Packaging, Branding and Marketing, Printed and Electronics Media, Travel and Tourism) NON-FOOD (Examples: Pharmaceuticals, Health Products, Medical Devices, Cosmetics and Toiletries) 7 Key Factors 2 billion by 2010 Growth in the Muslim population, the primary market for Halal food Affluent lifestyle Rising income in primary markets for Halal food Health conscious Increasing demand for halal, safe, high quality food in primary markets Diversified choices Increasing demand for greater variety in primary markets Assurance & Guarantee Incidents of food marketed as Halal but failing to meet the Halal requirements has spurred demand for genuine Halal products (Assurance & Guarantee)
5 Market Potential by Region REGION MUSLIM POPULATION 2005 (million) PER CAPITA FOOD EXPENDITURE (USD) HALAL MARKET VALUE (USD MIL) AFRICA ,443 WEST ASIA ,150 SOUTH CENTRAL ASIA ,440 SOUTH EAST ASIA ,230 CHINA ,865 EUROPE (inc RUSSIA) ,250 63,988 NORTH AMERICA 9.0 1,750 14,455 SOUTH AMERICA OCEANIA , TOTAL 1,608 m USD 580,916 m Source: Global market value for halal food USD billion annually (Source A.T Kearney) Halal Business Global market value for trade in halal food and non-food products USD 2.77 trillion annually 10
6 Market Potential by Product Clusters Cosmetics & Personal Care 68% FMCG 62% F&B Global market for Halal-potential products, 2005** Does not include Islamic Financial Services. Services involved in final product e.g. certification, logistics, R&D are included in sectoral values ** Based on sales revenue *** Halal processed food is taken as 66% of the total based on world Halal meat consumption **** Only non-alcoholic beverages Source: Euromonitor reports; FAOSTAT Middle East Key Factors Countries in the region are among those with: 1. highest per capita incomes in the world; 2. highest population growth rates in the world; 3. fastest growing middle class in the world 4. Net importers of processed food United Arab Emirates Saudi Egypt
7 Trade Performance: Imports of Middle East (2009, in USD millions) COUNTRIES Saudi UAE Turkey Egypt Kuwait Qatar Total Live animals 113, ,997 33,666 68,365 73,926 46, ,130 Meat & edible meat offal 1,302, ,671 1, , , ,405 3,220,582 Dairy products, eggs, honey, edible animal product 629, , , , ,782 44,528 1,769,050 Products of animal origin 7,606 2,617 28,949 17, ,581 Edible vegetables & certain roots, tubers 163, , , ,488 79,274 48,490 1,282,235 Animal, vegetable fats & oils, cleavage products 460, ,054 1,094,076 1,096,879 85,977 19,468 3,183,830 Meat, fish & seafood food preparation 140, ,687 3, ,465 63,626 20, ,553 Miscellaneous edible preparation 341, , ,770 61,043 70,852 31,816 1,101,530 Essential oils, perfumes, cosmetics, toiletries 727,097 1,304, , , ,783 54,401 3,208,767 Total 3.8 B 4.1 B 2.7 B 2.8 B 1.1 B 418 M 14.9 B Source : International Trade Centre; Trade Competitiveness Map The GCC countries: Saudi Arabia United Arab Emirates (UAE) Kuwait Oman Bahrain Qatar The highest economy and gross domestic product (GDP) per capita amongst other OIC (Organization of the Islamic Conference) member countries. Total market size of Halal food products is USD38.3 billion (2004); USD43.8 billion (2009), USD44.9 billion (2010). The self-sufficiency level is generally less than 10%, meaning average total imported food valued at USD30 to 35 billion annually. 14
8 IMPORT OF HALAL MEAT AND MEAT-BASED PRODUCTS 15 SOURCES OF IMPORTED HALAL MEAT IN GCC 16
9 Trade Issues The Halal market is huge and is global BUT Halal is interpreted differently in different countries Lack of mutual recognition on trade matters among OIC country members Lack of competent Halal Certification Bodies Lack of common Halal standards Lack of halal certified food products in non-oic countries 17 Trade Issues (continue) In almost all countries, Halal is a religious issue. Hence, the state government will not intervene Normally, Halal is regulated under the labeling law Halal certification, therefore, is conducted by many agencies/ associations/ councils/ federations, etc Most traded Halal products are imported from non- OIC countries The OIC is a net importer of Halal food 18
10 What to Focus? Halal Certification Bodies (HCB) Competency of HCBs (Brazil, EU, India, Australia and US) Halal Standards set by the competent authority Halal Logo authenticity Halal Import Control: Policies and Regulations Import Data base Automated food import management system clearance, hold, analysis or rejection Screening tools: rapid test kit, analytical support 19 HALAL CERTIFICATION BODIES CURRENT SCENARIO Number of Halal Certification Bodies by Region NORTH AMERICA 19% SOUTH AMERICA 4% ASIAN 16% AUSTRALASIA 34% AFRICA 4% Over 300 Halal CBs in operation, however only 33% are registered legal bodies EUROPE 23% Total of 34 countries surveyed :107 Organisations 20
11 RECOGNISED HALAL CBs IN GCC COUNTRIES Australia / Oceania 17% South America 12% North America 12% Asia 19% Africa 12% Europe 28%s Total No of CBs recognised : LACK OF MUTUAL RECOGNITION GCC COUNTRIES MALAYSIA INDONESIA 33 22
12 LIST OF HCBs RECOGNISED BY MALAYSIA, INDONESIA AND GCC No Country HCB Logo 1 Australia Australian Halal Food Services (AHFS) 2 Australia Adelaide Mosque Islamic Society of South Australia 3 Australia Islamic Association of Katanning Inc Australia Islamic Co-ordinating Council of Victoria (ICCV) Australia Australia Netherlands The Australian Federation of Islamic Councils (AFIC) The Perth Mosque of Western Australia Inc Control Office of Halal Slaughtering & Halal Quality Control 23 LIST OF HCBs RECOGNISED BY MALAYSIA, INDONESIA AND GCC No Country HCB Logo 8 New Zealand 9 Philippines Federation of Islamic Associations of New Zealand (FIANZ) Islamic Da wah Council of the Philippines (IDCP) Singapore South Africa Thailand USA/Canada USA Islamic Religious Council of Singapore (MUIS) South African National Halaal Authority (SANHA) The Central Islamic Committee of Thailand (CICOT) Islamic Food and Nutritional Council of America (IFANCA) Islamic Services of America (ISA) 24
13 Halal has Gone Mainstream Halal logo has now become a symbol of quality and religious compliance and this makes it sound as the new green. McDonald s in Singapore has seen an influx of eight million patrons a year after obtaining a Halal certification. Since being certified Halal, KFC, Burger King and Taco Bell have all seen an increase of 20 per cent in customers Halal has also been extended to downstream products and services such as cosmetics and pharmaceuticals, hygiene products and nutritional supplements, travel, art, music and books; even marriage and finance 25 Issues in Harmonization of Standards ISSUES SOLUTION 1. SOURCES OF GELATINE? 2. SLAUGHTER BY AHL AL-KITAB? 3. MECHANICAL SLAUGHTER? 4. PRE-SLAUGHTER STUNNING? 26
14 Possible Solutions Any labelling/ representations (incl. label, mark, tag, verbal, signage etc) must conform to a Halal standard Common Halal standard for all Islamic countries The standard must be made available and transparent to everyone (government, industry, consumer) The standard should be clear in its requirements for all the relevant stakeholders, especially the manufacturers to understand and implement effectively Competency of Halal Certification Bodies demand accreditation A robust framework of a trading hub and global network should be in place to consistently monitor and enforce the standard, when necessary Import Control system should be strengthened. 27 Proposed Collaboration Malaysia KISR R&D R&D Education & Training Consultancy Halal Products & Services Technology Commercialization Investment & Financial Support Market Network Laboratory Support
15 Areas of Halal Research and Development Development of Analytical Methods for Adulteration and Authentication Development of rapid screening methods for halal detection Alternative sources (ingredients) Development of halal cosmetic products Development of halal pharmaceutical products DEVELOPMENT OF HALAL ANALYTICAL METHODS AND PRODUCT INNOVATION SLAUGHTER MANAGEMENT Slaughtering Procedure Animal Welfare and Safety Meat Quality Abattoirs and standard operating procedure Animal handling and management Halal Legal Framework Shariah and the Industry Halal Standards and Assurance Systems Halal Marketing and Branding Halal Nutrition HALAL POLICY, MANAGEMENT, MARKETING AND CONSUMER AFFAIRS HALAL EDUCATION Halal Diploma, Degree and Post-graduate education Halal online and long distance educaion Halal Training and Awareness for the Public and Industry Players Halal Inspectors and Auditors Training Vice Chancellor of Universiti Malaysia Sabah: Prof. Datuk Dr. Mohd. Harun Abdullah Dean, School of Food Science and Nutrition Assoc.Prof. Dr. Sharifudin Md. Shaarani Established Food Safety and Quality Unit (FSQunit) Offers Halal Training and Consultancy FSQunit Head: Assoc.Prof. Mariam Abdul Latif Contact: Unit Head Liaison ext:
16 FSQ UNIT, UMS - Halal Training Modules UNDERSTANDING HALAL FOOD (HF) HALAL FOOD INDUSTRY DEVELOPMENT (FI) HALAL TRAINING PACKAGE (HTP) HF01 - Basics of Halal Food FI01 - Basics of Halal Food Industry Development HF01 + HF02 + MeSTI Halal and Thoyyib Food HF02 - Intermediates of Halal Food FI02 - Intermediates of Halal Food Industry Development FI01 + FI02 + GMP Halal Executive HF03 - Advanced Level of Halal Food FI03 - Advanced Level of Halal Food Industry Development FI03 + HACCP Professional Halal Auditor
17 SUMMARY Potential and opportunities of halal trade in the Middle East is great Halal certification and modern scientific approaches could reduce the concerns of Muslim consumers with regard to new processed foods Basics and principles of halal products and services should be fully understood by all stakeholders of halal industry to ensure integrity of halal all along the supply chain. SUMMARY The need for global unified halal standards Import control on halal products through competent halal certification bodies should be continuously monitored Development of a centralized trading hub for halal products and services Global network of accredited halal raw and finished halal products; based centrally in the Gulf Integration of existing agencies such as IDB, ICCI, ICRIC and Economic Chambers to synergize the implementation of the above hub/structure under the OIC.
18 THANK YOU FOR YOUR ATTENTION
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