Assoc. Prof. Hjh. Mariam Abdul LatifUniversiti Malaysia Sabah

POTENTIAL AND OPPORTUNITIES OF HALAL

TRADE IN THE MIDDLE EAST

First Halal Workshop11 May, 2014

Kuwait Institute for Scientific Research, State of Kuwait

مريم عبداللطيف. دأستاذ مشارك، نظم إدارة األغذية الحالل، كلية علوم الغذاء والتغذية،

جامعة ماليزيا صباح، ماليزيا

�� ارق ا�و�ط������رص ا���رة ا��ل ا

�ا�و�ور�� ا���ل 11 ���2014

���� ا�� �� �����ث ا�������� دو�� ا��

Content

• Introduction

• Market Potential

• Market Opportunities

• Proposed Collaboration

• Summary

Introduction

� Halal trade refers to buying and selling of halalproducts 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: ExportImportEntreport

� Halal food products ~ USD 548 billion� Global Halal Market ~ USD 2.1 trillion

4

23% of world’s population are Muslims (World Bank 2013)

World Muslim Population

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 1.628 bil lion

Continent World Population

2008

Muslim

Population

Muslims

by (%)

Africa 967 462.36 47.81

Asia 4,050.6 1,103.75 27.24

Europe 735.2 51.46 7.0

North America 331.7 7.13 2.19

South America 576.85 2.41 0.42

Oceania 33.54 0.50 1.49

Total 6,694.89 M 1,627.61 M 24 %

Source: http://www.islamicpopulation.com, Pop. Data - 2009 CIA World Factbook6

7

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, MedicalDevices, Cosmetics and Toiletries)

Key Factors

• Growth in the Muslim population, the primary market for Halal food 2 billion by 2010

• Rising income in primary markets for Halal food Affluent lifestyle

• Increasing demand for halal, safe, high quality food in primary markets Health conscious

• Increasing demand for greater variety in primary markets Diversified choices

• Incidents of food marketed as Halal but failing to meet the Halal requirements has spurred demand for genuine Halal products (Assurance & Guarantee)

Assurance & Guarantee

Market Potential by Region

REGION MUSLIM

POPULATION

2005

(million)

PER CAPITA FOOD

EXPENDITURE

(USD)

HALAL MARKET

VALUE

(USD MIL)

AFRICA 462.0 250 115,443

WEST ASIA 195.0 570 111,150

SOUTH CENTRAL ASIA 585.0 300 175,440

SOUTH EAST ASIA 266.0 350 93,230

CHINA 39.0 175 5,865

EUROPE (inc RUSSIA) 51.0 1,250 63,988

NORTH AMERICA 9.0 1,750 14,455

SOUTH AMERICA 1.6 500 820

OCEANIA 0.35 1,500 525

TOTAL 1,608 m USD 580,916 mSource:

www.islamicpopulation.com,,Euromonitor

Halal BusinessGlobal market value

for halal food

USD 641.5 billion

annually

(Source A.T Kearney)

Global market

value for trade in

halal food and

non-food products

USD 2.77 trillion

annually

10

Market Potential by Product Clusters

Global market for Halal-potential products, 2005**

•68% FMCG

•62% F&B

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

Cosmetics &

Personal Care

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

Middle East Key Factors

Source : International Trade Centre; Trade Competitiveness Map

COUNTRIESSaudi UAE Turkey Egypt Kuwait Qatar Total

Live animals 113,538 263,997 33,666 68,365 73,926 46,638 600,130

Meat & edible meat offal 1,302,153 751,671 1,600 539,750 473,003 152,405 3,220,582

Dairy products, eggs, honey,

edible animal product 629,539 458,108 116,815 406,278 113,782 44,528 1,769,050

Products of animal origin 7,606 2,617 28,949 17,615 515 279 57,581

Edible vegetables & certain

roots, tubers 163,677 438,228 246,078 306,488 79,274 48,490 1,282,235

Animal, vegetable fats & oils,

cleavage products 460,376 427,054 1,094,076 1,096,879 85,977 19,468 3,183,830

Meat, fish & seafood food

preparation 140,196 115,687 3,036 119,465 63,626 20,543 462,553

Miscellaneous edible

preparation 341,480 267,569 328,770 61,043 70,852 31,816 1,101,530

Essential oils, perfumes,

cosmetics, toiletries 727,097 1,304,134 839,551 155,801 127,783 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

Trade Performance: Imports of Middle East(2009, in USD millions)

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

IMPORT OF HALAL MEAT AND

MEAT-BASED PRODUCTS

15

SOURCES OF IMPORTED

HALAL MEAT IN GCC

16

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

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

ASIAN

16%AFRICA

4%

EUROPE

23%

NORTH

AMERICA

19%

SOUTH

AMERICA

4%

Total of 34 countries surveyed :107 Organisations

AUSTRALASIA

34%

Number of Halal Certification Bodies by Region

Over 300 Halal

CBs in

operation,

however only

33% are

registered

legal bodies

20

RECOGNISED HALAL CBsIN GCC COUNTRIES

South America

12%

Europe

28%s

Africa

12%

North America

12%

Asia

19%

Australia / Oceania

17%

Total No of CBs recognised : 52

21

LACK OF MUTUAL RECOGNITION

25

GCC

COUNTRIES

52

MALAYSIA

50INDONESIA

33

23 16

25

14

22

LIST OF HCBs RECOGNISED BY MALAYSIA, INDONESIA AND GCC

25

No HCBCountry Logo

1 Australia Australian Halal Food Services (AHFS)

2 Australia

Australia

Australia

Australia

Australia

Netherlands

3

4

5

6

7

Adelaide Mosque Islamic Society of South Australia

Islamic Association of Katanning Inc.

Islamic Co-ordinating Council of Victoria (ICCV)

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 HCBCountry Logo

8 New ZealandFederation of Islamic Associations of New Zealand

(FIANZ)

9 Philippines

Singapore

South Africa

Thailand

USA/Canada

USA

10

11

12

13

14

Islamic Da’wah Council of the Philippines (IDCP)

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

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

26

ISSUES SOLUTION

1. SOURCES OF GELATINE ?

2. SLAUGHTER BY AHL AL-KITAB ?

3. MECHANICAL SLAUGHTER ?

4. PRE-SLAUGHTER STUNNING ?

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

R&D

Education & Training

Market Network

Halal

Products

& Services

Laboratory Support

R&D

Malaysia KISR

Consultancy

Technology

Commercialization

Investment & Financial

Support

Proposed Collaboration

• 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

• Halal Legal Framework

• Shariah and the Industry

• Halal Standards and

Assurance Systems

• Halal Marketing and

Branding

• Halal Nutrition

• Slaughtering Procedure

• Animal Welfare and Safety

• Meat Quality

• Abattoirs and standard operating procedure

• Animal handling and management

• 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

HALAL EDUCATION

HALAL POLICY, MANAGEMENT,

MARKETING AND CONSUMER

AFFAIRS

Areas of Halal Research and Development

• 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 – mariam@ums.edu.my

Liaison – hazwan@ums.edu.my

+6088-320000 ext: 8688

+6088-320259

FSQ UNIT, UMS - Halal Training Modules

UNDERSTANDING HALAL FOOD

(HF)

HF01 -

Basics of Halal Food

HF02 -

Intermediates of HalalFood

HF03 -

Advanced Level of HalalFood

HALAL FOOD INDUSTRY DEVELOPMENT

(FI)

FI01 -

Basics of Halal Food Industry Development

FI02 -

Intermediates of HalalFood Industry Development

FI03 -

Advanced Level of HalalFood Industry Development

HALAL TRAINING PACKAGE

(HTP)

HF01 + HF02 + MeSTIHalal and Thoyyib Food

FI01 + FI02 + GMP

Halal Executive

FI03 + HACCP

Professional HalalAuditor

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 integrityof 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.

THANK YOU FOR YOUR ATTENTION