Trading ‘halal’

The government last month introduced the long awaited bill in the National Assembly to set up a body to regulate domestic halal food industry and lifestyle products and explore ways to tap into multi-billion dollar international market of such items.

The bill provides for the establishment of Pakistan Halal Authority (PHA) led by the minister of science and technology which is to be run by a high-powered board of governors.

According to the bill, the authority will oversee, “imports and exports with foreign countries and inter-provincial trade and commerce in all such articles and processes which are described or represented as being halal”.

The global halal industry is estimated to be worth hundreds of billions of dollars and is multiplying at a fast pace as Muslim populations grow world over.

The world's Muslim population is currently estimated at around 1.6 billion and it is forecast to add a billion people by 2050 with rising education and income levels.

The halal food industry that involves processing, production and distribution of food and drinks is currently worth around trillion dollars and is expected to grow to 1.6 trillion by 2018.

Among 57 members of the Organization of Islamic Conference OIC), Malaysia is one of the largest suppliers of halal products in the international market. In 2013, it exported $9.8 billion worth of halal products.

Interestingly it is not just Muslim countries which are involved in trade of halal products ranging from food items to cosmetics to medicines to toiletries but non-Muslim countries too are making concerted efforts to grab maximum benefits from this lucrative business.

U.S. manufacturers, such as Kelloggs and Hershey, plan to build halal-compliant plants in Malaysia. In Thailand, more than a quarter of food factories are already making halal products.

Brazil is the world's second top exporter of meat and poultry to Muslim-majority countries after the U.S.

The Brasil Food Company, world's seventh biggest food company, last year opened its first manufacturing site in the Middle East in UAE's capital, Abu Dhabi. The $160 million factory processes poultry from Brazil for repackaging and shipping to other countries.

The company already exports 70,000 tons of chicken to the Middle East each month, making the region its biggest export market.

According to industry officials halal food account for about a fifth of world food trade.

Today there are around 30 halal certification bodies in the U.S. and several mainstream supermarkets that carry halal food items.

The Islamic Food and Nutrition Council of America, a not-for-profit halal certification organization, said the domestic U.S. halal market is estimated at $20 billion.

Ironically, successive Pakistani governments as well as businessmen did not make any serious effort to make inroads into this lucrative global market despite the fact that being a Muslim country all of its products are halal.

According to officials, Pakistani halal food exports account less than five percent of the global trade of such items.

In his statement of purpose attached with the bill, minister of science and technology Rana Tanveer said Pakistan’s nominal share into exports of halal items was because of the “non-existence of a legal and recognised entity/authority at the national level dealing with the halal sector.”

The proposed Pakistan Halal Authority will be tasked to recommend “halal standards for government-notified articles and processes for adoption by a National Standards Body in accordance with comprehensive guidelines of Organisation of Islamic Cooperation (OIC), provide for certification of halal products and authorise a halal logo”.

Contravention of the new law will be punishable with imprisonment of up to six months, or with the fine of up to Rs500,000, but not less than Rs50,000, or with both.

The OIC guidelines, developed by what is described in the document as a Standardisation Expert Group, devote a substantial portion to defining halal and non-halal animals and manual or mechanical slaughtering of halal animals by an adult Muslim.

Though Pakistan has decided to follow OIC guidelines for manufacturing of Halal products, defining what is halal has been an issue of hot debate among Islamic scholars.

The general understanding is that halal products should not be contaminated with pork or alcohol and that livestock is slaughtered in accordance with Islamic Shariah law.

Similar to kosher practices, Islam requires the animal is killed with single slash to the throat while alive. It is intended as a way for animals to die swiftly and minimize their pain.

However, opinions vary greatly over what is permissible and what is not. Despite attempts by international Islamic bodies to achieve worldwide guidelines, there are no global standards for halal certifications.

According to one interpretation by religious scholars, chicken must be slaughtered by hand to be considered halal.

Others say it is acceptable if the chicken is slaughtered by machine, as is the case in much of the fast-paced food industry around the world.

To accommodate various Muslim consumers, several companies even specify on their packaging how the chicken was slaughtered.

As a result of these differences, global food firms face higher production costs as they must comply with a mix of national processing standards that can vary widely even within the same country.

Failing to navigate these differences leaves companies exposed to the risk of using ingredients permissible under one standard but not another.

For example, last year several Muslim consumer groups in Malaysia called for a boycott of all Cadbury and Mondelez products after the health ministry said it had detected traces of pig DNA in Dairy Milk chocolates.

The news generated an online furor and prompted several rounds of testing by authorities from neighbouring Indonesia to Saudi Arabia.

Further testing by Malaysia's Islamic affairs agency, the country's sole official halal certifier, however, showed that the initial tests had not been definitive and the chocolate was actually halal.

But the incident sparked a heated debate among Islamic scholars in Malaysia over definition of halal.

Pakistani policy-makers as well as exporters need to be fully aware of these issues as they prepare to venture into international market of halal products.

According to government officials, the proposed PHA will develop polices, plans and programmes for ensuring compliance of Halal articles and processes with the Halal standards notified by the national standards body, PSQCA, and develop and authorise use of Halal logo for Halal articles and processes.

The private and public sector companies would be accredited with the halal food authority and efforts would be made to boost the export of halal products through the proposed regulatory authority.

If Pakistani products are marketed properly, industry officials say there is no doubt that Pakistani businessmen could grab a major share of international halal trade.

The writer is a senior journalist based in Islamabad