REACHING THE MUSLIM CONSUMER
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1 BIMP-EAGA/IHI ALLIANCE HALAL INDUSTRY WORKSHOP - POULTRY REACHING THE MUSLIM CONSUMER DARHIM D. HASHIM CEO, IHI ALLIANCE UNIVERSITY OF AUCKLAND BUSINESS SCHOOL, NEW ZEALAND ASIA NEW ZEALAND FOUNDATION 12 SEPTEMBER 2012
2 CONTENT ABOUT IHI ALLIANCE HALAL: DEFINITION THE GLOBAL MUSLIM MARKET THE HALAL PRODUCTS AND SERVICES INDUSTRY STANDARDISATION OF HALAL NO: IHI/PSTN/2012/03/001/mma
3 ABOUT IHI ALLIANCE
4 INTERNATIONAL HALAL INTEGRITY ALLIANCE Registered on the 30 th April 2007, as an international, non-profit, non-governmental, private-sector business association. Created to serve as a platform for providing services to its members, representing their interests and to liaise with governments, organizations and business communities. On 11 May 2008, IHI Alliance signed a partnership agreement with the Islamic Chamber of Commerce & Industry to implement a Global Halal program for the OIC NO: IHI/PSTN/2012/03/001/mma
5 STRUCTURE Organisation of Islamic Cooperation Principal Representative of OIC on Halal Islamic Chamber of Commerce & Industry Secretariat for OIC Standards Development Appointed as Halal Authority COMCEC International Halal Integrity Alliance Provides input on standard NO: IHI/PSTN/2012/03/001/mma
6 HALAL: DEFINITION 6
7 HALAL misconceptions A survey was conducted on a wide cross-section of society of Muslims and non-muslims in both Muslim minority and majority countries: What does Halal mean to you? Muslim food Ethnic food Kebab Food that has been blessed by an Imam Slaughtering an animal facing Mekkah 7
8 HALAL - holistic Clean, safe to eat Food that is permissible for Muslims to consume Food to be consumed by Muslims and non-muslims alike..oh Mankind, eat what is Halal and Tayyib (wholesome) from the earth (2:168) A value chain A way of life 8
9 HALAL a default standard General Quranic guidance dictates that all foods are halal except those that are specifically mentioned as haram (unlawful). The unlawful foods are specifically mentioned in The Holy Quran in the following verses: He hath forbidden you only carrion, and blood, and swine flesh, and that which hath been immolated to (the name of) any other than Allah Chapter II, Verse 173 Forbidden unto you (for food) are carrion and blood and swine flesh, and that which hath been dedicated unto any other than Allah, and the strangled, and the dead through beating, and the dead through falling from a height, and that which hath been killed by (the goring of) horns, and the devoured of wild beasts saving that which ye make lawful (by the death-stroke) and that which hath been immolated unto idols. And (forbidden is it) that ye swear by the divining arrows. This is an abomination Chapter V, Verse 3 9
10 HALAL a default standard Consumption of alcohol and other intoxicants is prohibited according to the following verse: O ye who believe! Strong drink and games of chance, and idols and divining arrows are only an infamy of Satan s handiwork. Leave it aside in order that ye may succeed. Chapter V, Verse 90 10
11 HALAL a default standard In summary, all clean and wholesome foods are permitted for consumption by Muslims except the following categories, including any products derived from them or contaminated with them: Carrion or dead animals Flowing or congealed blood Swine, including all its by-products Animals slaughtered without pronouncing the name of God on them Animals killed in a manner that prevents their blood from being fully drained from their bodies Animals slaughtered while pronouncing a name other than God Intoxicants of all types, including alcohol and drugs Carnivorous animals with fangs, such as lions, dogs, wolves, or tigers Birds with sharp claws (birds of prey), such as falcons, eagles, owls, or vultures Certain land animals such as frogs and snakes 11
12 THE UNIVERSE OF CONSUMER GOODS HALAL HARAM 12
13 THE GLOBAL MUSLIM MARKET
14 THE RISE OF THE MUSLIM CONSUMER MARKET World Muslim Population Muslim Population is increasing at the rate of 1.84% (by Carniege Endowment for International Peace). The Muslim population in 2009 is estimated at billion Continent Total Population 2009 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 14
15 GLOBAL HALAL MARKET- MUSLIM CONSUMERS Estimated Size of Global Halal Food Market Continent World Population 2008 Per capita food expenditure Halal Market Value (USD) Africa ,590 Asia ,500 Europe ,250 64,325 North America ,750 12,478 South America ,205 Oceania , Total 1, M USD 635,848 M Source: Pop. Data CIA World Factbook
16 Source: Mapping the Global Muslim Population (2009) - Pew Research Center
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20 MARKET ASSESSMENT: GCC COUNTRIES The GCC (Gulf Cooperation Council) countries, Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Oman, Bahrain and Qatar, have among the highest economy and gross domestic product (GDP) per capita amongst other OIC (Organization of the Islamic Cooperation) member countries. The total consumption or market size of Halal food products in the GCC countries reached USD38.3 billion in 2004; continued to increase to USD43.8 billion in 2009, and is projected to reach USD44.9 billion in The self-sufficiency level is generally less than 10 per cent, except Saudi Arabia (40 per cent), which means total imported food can easily stand at USD30 to 35 billion annually.
21 SOURCES OF IMPORTED HALAL MEAT IN GCC SOURCES OF HALAL MEAT IMPORTS INTO GCC COUNTRIES (2007) SOURCES OF HALAL POULTRY MEAT IMPORTS INTO GCC COUNTRIES (2007) Data taken from THE HALAL JOURNAL S GLOBAL HALAL FOOD MARKET REPORT / FIRST EDITION / MARKET INTELLIGENCE SERIIES #1 / VOLUME 3
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24 THE HALAL PRODUCTS AND SERVICES INDUSTRY
25 ORGANISATION OF ISLAMIC CONFERENCE (OIC) GLOBAL HALAL CERTIFICATION AND REGULATORY ISSUES In almost all countries, Halal is a religious issue. Hence, the state will not intervene; At most, Halal is regulated under the labeling law; Halal certification, therefore, is conducted by many agencies/ associations/ councils/ federations, etc; No unified Halal standard and its associated logo.
26 CHALLENGES IN THE HALAL INDUSTRY The Halal market is global BUT Halal is interpreted differently in different countries Negative perception of Halal / Islamaphobia Lack of availability of Halal certified food in non-oic countries Food science & technologies not sensitive to Halal matters Most traded Halal products imported from non-oic countries The OIC is a net overall importer of Halal food 26
27 CONSUMER AWARENESS Research conducted by the World Halal Forum indicated that the awareness level has expanded beyond meat and meat-based products to other food products, even to cosmetics and pharmaceutical products. While awareness is increasing, the understanding of Halal or what is Halal has become polarised which leads to different interpretations causing confusion, misunderstanding and even fraud by certain individuals and bogus associations selling Halal certificates (ASIDCOM research). The second and third generations of Muslims in western countries have shown a higher Halal awareness level than their elder generation and constantly seeking trusted Halal logo/ labels to ensure integrity In the world s most discerning markets such as in Europe, Muslim consumers also expect issues such as animal welfare, biodiversity, eco-ethical, fair trade and socially responsible, to be taken into account and embodied within the whole Halal production chain.
28 STANDARDISATION OF HALAL 28
29 HALAL STANDARD PERCEPTION X X X X X X HALAL X X X X X DEFINITIVE LINE? X X X X X HARAM X X X X X X 29 29
30 WHERE DO WE DRAW THE LINE? Cost per unit 30
31 LIBERAL STANDARD C1 L 31
32 STRICTEST STANDARD C2 S 32
33 MODERATE STANDARD C3 M 33
34 EVOLUTION OF THOUGHT DIVINELY REVEALED SCRIPTURE HADITH (TRADITIONS) MADHABS (SCHOOLS OF THOUGHT) IJTIHAD (INTERPRETATIONS) FATWA SAHIH AL-BUKHARI SAHIH MUSLIM SHI AH. JA FAR AL-SADIQ 12 BRANCHES IBN SINA IBN RUSHDI INTERNATIONAL ISLAMIC FIQH ACADEMY MALAYSIAN NATIONAL FATWA COUNCIL SUNAN ABU DAWUD HANAFI YUSUF AL- QARADAWI INDONESIA ULEMA COUNCIL SUNAN IBN MAJAH SUNNI MALIKI SHAFI I RABITA (MUSLIM WORLD LEAGUE) SUNAN AL NASAI HANBALI THE FIQH COUNCIL OF NORTH AMERICA 34
35 ISLAM BY SCHOOLS OF THOUGHT (MADHABS) THE FIQH COUNCIL OF NORTH AMERICA 35
36 INTERNATIONAL STANDARDISATION EFFORTS The International Organisation for Standardisation is the obvious choice, however ISO will not develop any standards based on religious requirements. Codex Alimentarius Commission have guidelines for the use of the Term Halal but stays clear of the most contentious issues. The World Halal Council is an association of Halal Certification Bodies from around the world predominantly from food exporting countries. One OIC country is a member. COMCEC is developing an OIC Halal Standard, through participation of member countries, but does not engage major Halal producing nations from Non OIC countries 36
37 CHALLENGES OF AN OIC STANDARD MANDATE Fundamental differences and variances in interpretation of Halal across member states resulting in unresolved issues Are member states willing to ratify the standard at the national level? Varying levels of development of Halal standards, certification & regulation across member states (most have none) What happens to those member countries who already have established national Halal standards? Will the rest of the OIC accept a standard that is developed, headquartered and championed in a secular state without its own national Halal standard? 37
38 INTERNATIONAL STANDARDS DEVELOPMENT Animal welfare & handling Animal feed Lab Testing Logistics Food Processing IHI Alliance standards development is based on ISO/IEC guidelines for International Standards Development, while adhering to WTO-TBT Code of Good Practice for Standards Development IHI Halal Standard Slaughter & processing Food Service Cosmetics & toiletries Finance Pharmaceutical 38
39 REGULATORY FRAMEWORK 39
40 FRAMEWORKS FOR HALAL FOOD REGULATION COUNTRY MODEL REGULATORY INSTRUMENTS LEGISLATION (YES/NO) OFFICIAL STANDARDS (YES/NO) CERTIFICATION (GOVERNMENT/SEMI- GOVERNMENT/PRIVATE) AUSTRALIA PUBLIC - PRIVATE YES NO GOVERNMENT & PRIVATE AUSTRIA PRIVATE NO YES PRIVATE Food business operator Food business operator BRUNEI PUBLIC YES YES GOVERNMENT CANADA PRIVATE NO NO PRIVATE CHINA PUBLIC NO YES GOVERNMENT FRANCE PUBLIC - PRIVATE NO NO PRIVATE INDONESIA PUBLIC PRIVATE NONE NONE SEMI-GOVERNMENT MALAYSIA PUBLIC YES YES GOVERNMENT NEW ZEALAND PUBLIC -PRIVATE YES YES PRIVATE PHILIPPINES PRIVATE NO YES PRIVATE SINGAPORE PUBLIC YES YES GOVERNMENT 40
41 HALAL CBs CURRENT SCENARIO Number of Halal Certification Bodies by Region NORTH AMERICA 19% SOUTH AMERICA 4% ASIAN 16% AUSTRALASI A 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 41
42 WHERE DO WE DRAW THE LINE? Halal Certifying Organisations (300+) Registered as a legal Entity (107) Certifying against a recognised standard Clear and transparent Audit & Certification procedures Accredited by a Competent AB 42
43 INTERNATIONAL BENCHMARK IAF International Accreditation Forum Standards and Schemes ISO/IEC Example Schemes Accreditation Body + MLU PEER REVIEW Accreditation Body + MLU Standards Malaysia UK Accreditation Service ISO/IEC Certification Body Certification Body SQAS (SIRIM) SGS, Lloyds TUV ISO/IEC Guide 65 Supplier Supplier Supplier Company requiring certification Scheme ISO/IEC
44 CURRENT SCENARIO FOR HALAL CERTIFICATION Standards and Schemes? Certification Body Certification Body Supplier Supplier Supplier Supplier Supplier Codex? MS 1500? GSO? CB Standards? 44
45 Global Halal Standards PROPOSED STRUCTURE FOR HALAL CERTIFICATION IHAF International Halal Accreditation Forum IHI Alliance Standards and Schemes Accreditation Body + MLU PEER REVIEW Accreditation Body + MLU Accreditation Scheme for Halal CBs Certification Body Certification Body Halal CB Audit & Certification Guidelines Supplier Supplier Supplier 45
46 REGULATIONS AND ISSUES DEFINITION OF HALAL VERSUS THE USE OF THE WORD HALAL A requirement according to Islamic dietary law incorporated into the Halal food regulation 1. General guidelines for the use of the term Halal but the presence of disclaimer Codex : The Codex Alimentarius Commission accepts that there may be minor differences in opinion in the interpretation of lawful animals and in the slaughter act, according to the different Islamic School of Thoughts. As such, these general guidelines are subjected to the interpretation of the appropriate authorities of the exporting countries 46
47 MOVING FORWARD 47
48 HOW TO ACHIEVE A GLOBAL HALAL STANDARD? Option 1: Harmonise This has been attempted (IHI Alliance, OIC COMCEC) Problem is: HARMONISE = COMPROMISE It is unlikely that Muslim countries or organisations would be readily willing to withdraw from a pre-conceived position. 48
49 HOW TO ACHIEVE A GLOBAL HALAL STANDARD? Option 2: Universally accepted standard by all Muslims No stunning No mechanical slaughter knife Hand slaughter by a Muslim Recitation of Tasmiyyah on individual animals 49
50 HOW TO ACHIEVE A GLOBAL HALAL STANDARD? Option 3: Live and let live Allow for diversity Accommodate acceptable differences Consolidate to a few standards only LINK 1 Grouping possibly to be based on trade blocs (driven perhaps by regional Free Trade Agreements) 50
51 BLOCS OF COMMON STANDARDS CENTRAL ASIA MENA ASEAN
52 INFORMED CHOICE Strict criteria > Includes holistic values (ethical, sustainable, low carbon footprint etc) Additional criteria > Minimises risk + ambiguity Meets minimum criteria > Enable affordable goods for masses 52
53 INTERNATIONAL HALAL INTEGRITY ALLIANCE M-3-20 PLAZA DAMAS, 60 JALAN SRI HARTAMAS 1, SRI HARTAMAS KUALA LUMPUR, MALAYSIA / info@ihialliance.org A PARTNER OF ISLAMIC CHAMBER OF COMMERCE & INDUSTRY P.O.BOX: 430 JEDDAH 21411, KINGDOM OF SAUDI ARABIA
54 CONSOLIDATED STANDARDS STUN MECHANICAL SLAUGHTER BACK
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