Halal Regulation in Asia and Its Impact on Food

Halal Leads Ethical Labelling Prospects Globally

With a USD55 billion market in 2017, the halal packaged food and drinks global industry is set for more gains in the next five years, with 5% value CAGR predicted.

This makes it the most optimistic type of ethical labelling for packaged food and drinks, outpacing other well-known types like recycling, charity, “no added sugar” and “no artificial” claims. Growth is driven by the UAE and Indonesia although Asia Pacific remains the largest contributor with USD50 billion in 2017.

This is due to the cultural and religious mix across Asia Pacific, and the presence of strong accreditation bodies, making the region’s halal segment a relatively stable and lucrative market. It is interesting to note that China is among the highest-ranked in value sales despite having a Muslim minority population.

Accreditors for Halal Certification Likely to Remain Specific to Markets

Strong regulators from the likes of Malaysia, Singapore and Indonesia are key in setting a high standard for other markets to follow. Across Asia Pacific, governments and religious bodies are working together to improve the domestic state of halal regulation, with visible efforts seen in Thailand, the Philippines, etc.

Despite demands in the market for a unified global standard to ease manufacturers’ challenges in getting certified, the emergence of one is unlikely in the foreseeable future. Hence, guidelines will likely remain separate and vary across markets.

Alternative Halal Compliance Strategies Gain Interest

Due to various reasons such as financial capability, uncertainty, and lack of awareness, other claims of halal compliance are gaining popularity to claim a slice of the growing demand for halal.

Muslim-owned businesses which leverage on consumer trust and shared values between business-owner and consumers are common. Hence, Muslim-owned businesses represent potential white spaces for halal-certified ingredients manufacturers to tap on. On the other hand, Muslim-owned businesses for packaged products may not be able to project these values visibly to consumers and gain their trust, in which case certification provides more assurance.

There are also businesses which choose to claim the exclusion of prohibited ingredients in Islamic law, which relies on the knowledge of consumers to exercise their own discretion when purchasing.

In addition, false logos and unaccredited logos add to the confusion, with illegal syndicates found in less regulated regions or self-designed logos added to product packaging to ride on the trend.

Development Still in the Pipeline for Most Markets to Improve the Halal Infrastructure

Despite Asia Pacific’s large market size and well-known certifying bodies, developments are still expected. Pakistan, Indonesia, China and the Philippines are key markets to learn from as they have varying challenges and government strategies, in addition to being in different stages of stability for halal regulation.

Despite Strong Focus on Regulation, Holistic Ethical Labelling Should Be Established

Halal labelling provides assurance and a display of dedication to consumers. However, beyond certification, consumers also value products containing ingredients that are ethical by nature, and scrutinise packaging more closely. Even though halal labelling is set to show the strongest growth, ethical positioning is also imperative.

Packaging labelling could be further supported by other ethical values such as animal welfare and environmental sustainability in order to achieve a holistic ethical positioning. This will also appeal to non-Muslim consumers for a longer-term impact.