Prior to the 1980s, there were no significant initiatives to encourage the development of halal products and services in predominantly Muslim Malaysia. What was available then to protect the interest of Muslim consumers were two enacted laws; i.e the Trade Description (Use of Expression “Halal”) Order of 1975 and the Trade Description Act (Halal Sign Marking) 1975.
Under these acts, it is an offence to falsely label food as halal or use any halal sign or marking on specific food products indicating that such food is halal when in fact it is not.
Only in 1982, the government gave some serious attention to this matter and this led to the establishment of a Committee on Evaluation of Food, Drinks and Goods utilised by Muslims under the Islamic Affairs Division, Prime Minister’s Department.
The main task of this committee was to check and instill halal awareness amongst food producers, distributors and importers and the Division [currently known as the Department of Islamic Development Malaysia (JAKIM)] was responsible for the issuance of halal certificates.
However, in recent years the scenario has changed. The matter concerning the status of halal and haram with regard to products and services is something which is significant enough to be worth considering.
For the Muslims, halal refers to that which is permitted by the Syariah, and the term applies to every activity carried out by man; whether it is related to his ibadat, muamalat or mua’sharah.
When the term halal is used in relation to food, it refers to food that is in compliance with the laws of Islam as specified by the Quran and the Sunnah.
One common thing about the Muslims, although all may not be practicing Muslims, when it comes to the halalness of food consumed in their daily life, they are very sensitive about it. Nevertheless, their sensitivity might also be attributable to the resurgence of Islamic awareness and the increase of Islamic understanding amongst Muslims worldwide.
However, in relation to the economy, halal refers to business conducted in a manner deemed permissible in Islam. According to the 2004 estimates of the World Factbook published by the CIA, the Muslims representing 20.12% of the total world population, and have become the second largest community on earth after the Christians.
They are the majority in 57 countries and are also a sizeable minority in certain countries such as France. Despite the fact that the Muslims are separated by political boundaries and are scattered all over the globe, they form a 1.28 billion single nation by virtue of their religion, Islam.
In any economy, a large population serves as a huge market prospective for business. In fact, this is an advantage for manufacturers because an economy works with the population.
In this case, it does not require food manufacturers to calculate the returns on investment simply by assuming that they are operating their business in densely inhabited region of India or China.
Take Malaysia for example. Based on the assumption that all Malays are Muslims, there are 13.19 million Muslims in Malaysia or 54.1% of the total population.
Assuming each Muslim spends RM1.00 a day for food (which is a very conservative assumption), this can be translated into more than RM4.81 billion worth of halal foods consumed over the period of a year.
In addition we are mindful that halal foods are not only consumed by Muslims. Added to that there is also an international market as well. Therefore, it offers a sizeable market segment to producers.
Realizing the vast opportunity for the production and export of halal products, in 2003, the government set up The Technical Committee on Developing Malaysia as the Regional Hub For Halal Products which is chaired by the Ministry of International Trade and Industry (MITI).
To hasten the process of positioning Malaysia as the regional halal hub, the government has also put into place necessary infrastructures, among others, the gazetting of Malaysian Standard MS 1500:2004 �Halal Food: Production, Preparation, Handling and Storage “General Guidelines”, which incorporates compliance with international standards of Good Manufacturing Practices (GMP) and Good Hygiene Practices (GHP).
To stimulate the growth of investment in the halal food industry, a few fiscal incentives were introduced, most of which were announced during the Budget of 2005. Several trade and investment missions were also carried out by MITI. They are optimistic that the exercise will bear a fruit through smart partnership programmes with other countries, the OIC member countries in particular.
Based on the data collected from various agencies, the government�s efforts in pursuing its aspirations of becoming the regional hub for halal foods are gradually paying off.�
In 2003, Malaysia’s trade in processed food and non-alcoholic beverages amounted to RM10 billion with exports valued at RM5.3 billion. The figure increased to RM12 billion in 2004, with 50% or RM6.042 billion representing exports. The upward trend persisted in 2005 and for the period of January until September, the sales value of processed food stood at RM9.6 billion.
In terms of investment in the food processing business, the sector attracted RM1.07 billion worth of investments in 2003. The amount increased another 4.46% in 2004 and for the period between January and September 2005, the figure stood at RM1.23 billion, of which 62.26% was from domestic sources while the rest was from overseas.
It is not an overstatement to say that the halal food industry has a very promising future. This is based on the potential local and global market for halal products. According to the Malaysian Industrial Development Authority (MIDA), there is a growing global market for halal food, which is estimated at a hefty RM 560 billion (USD 150 billion) per annum.This huge potential provides great opportunities and should trigger a major strategy from Malaysian manufacturers especially Muslims entrepreneurs to tap into this market.
At present, is it estimated that 80% of the domestic market share of halal foods and products are dominated by non Muslims manufacturers. It is a paradox that such Muslims concerns are being capitalized by non Muslims businessmen. By right, Muslims manufacturers should lead the industry to grab whatever available opportunities and make the most profit from halal goods.
Four non Muslim countries namely China, Thailand, Australia and Brazil are now dominating Muslim markets with their halal products. As a matter of fact, the USA and the Europeans countries have also taken measures to produce halal food products realizing the huge market potential among Muslims consumers.
If the Muslim manufacturers in Malaysia would like to assist the government in enabling the aspirations of the country to become a hub for halal foods, they should act fast.
