Countries across the globe, Muslim and non-Muslim alike, have boosted income from food exports by joining a growing consumer market force particularly Muslim and those who needs extra guarantees on food safety and quality products. Introducing a halal standard in 2004, Malaysia has managed to secure a market share of billions worldwide. Seeing the potential, even non-Muslim countries have started to take important steps to produce food and non-food in conformity with the standard. The halal standard does not cover just food. It also has rules regarding the transporting, packaging, labelling and logistics of foods; preparation procedures are also analyzed to ensure their accordance with halal standards, HACCP, GMP and other recognized safety/quality standards and compliances. These standards are applied to food processing plant, hotel operations, pharmacies, cosmetics, medical and many other businesses.
The growth of Halal food market represents a significant potential for international companies, not only in Muslim countries but also, in western markets with significant and growing Muslim populations among whom Halal observance is on the increase.
The concept of halal is not confined to food itself. Halal products and services also include cosmetics, pharmaceuticals, clothing, financial services, and even tour packages. With so many to offer, the trade in halal products and services could potentially hit trillions of US dollars annually.
| USD2.1 trillion | Annual global market value for the entire Halal trade |
| USD900 million | Annual retail sales of Halal meat in the United Kingdom |
| 1.6 billion | Present gobal Muslim population |
| 1 billion | Muslim population in Asia |
| 3 billion | Estimated global Muslim population in 2010 |
source: Third industrial Master Plan
Synopsis of Malaysian Halal Market : Halal Food Hub
With the increase in global halal trade, many countries are taking several initiatives to capitalize on the growth potential. Malaysia, as a Muslim country, has all the elements and is well positioned to be the centre for the promotion, distribution and production of halal food, non-food products and other services. As the Malaysian Government is focusing on increasing food production in the country as well as making Malaysia an international halal hub, food-processing companies can leverage on Malaysia’s strength in halal certification and Government’s promotional efforts to capture the halal market abroad.
In the Ninth Malaysia Plan, Malaysia will be developed as a stop-centre for the certification of halal products and the Malaysia Halal certification will be promoted worldwide. In addition, Malaysia will be positioning as the knowledge centre for trade and investment promotion of halal products and services by designating Malaysia International Halal Showcase (MIHAS) and the World Halal Forum (WHF) as the international avenue for halal trade. Other Malaysia’s initiatives are Malaysia Kitchen, Taste of Malaysia promotion etc. Recognising the potential of the halal industry, the Government has established the Halal Industry Development Corporation (HDC), as a body to coordinate the overall development of the industry.
Halal Pharmaceuticals and Healthcare
According to an industry report for 2007, the Malaysia External Trade Development Corporation (Matrade) reported the value of medicines exported from Malaysia reached RM678 millions. Malaysian local companies are expected to use trade links to export halal medicine to cater Middle East growing market demand on Halal pharmaceuticals and healthcare.
Literally, halal pharmaceutical and healthcare are still new in Malaysia and the market demands have grown rapidly. Even though the higher living standard has increased the demand for convenience food, quality food and low fat products will face a higher demand because of the rapid increase in lifestyle diseases, such as high cholesterol, heart problems due to overweight and change in eating habits.
Halal Tourism
According to Malaysian Institute of Economic Research (MIER); between 1999 and 2003, tourists from Muslim Middle East countries to Malaysia rose from about 20,000 to more than 800,000. And this number is increasing.
In 2005, tourist arrivals from West Asia to Malaysia reached 47,646. While these arrivals accounted for only 0.1 per cent of the total arrivals, they accounted for 0.3 per cent of the total receipts1.
In another industry report, according to UAE-based Landmark Hotel Management Co, there are plans to launch 10 shariah compliant hotels and serviced apartments in the UAE and Saudi Arabia by the end of 2010. Six of the 10 projects will be launched in Dubai, two in Abu Dhabi, one in Fujairah and one in Jeddah, the company said in a statement. All the projects will be alcohol-free, serve halal food and give a percentage of their profit to charity.
Other reports on Halal Tourism. Click here
Asia, in particular, Indonesia, Pakistan, India, the People’s Republic of China, Singapore, Brunei, Thailand and West Asia, with a collective Muslim population of approximately 1 billion, is a prime target market for halal goods and services. Within this region, there is also fast developing halal food production industry being positioned to supply this lucrative market. South East Asia is becoming an important and competitive regional market for halal products, in view of its vast consumer market, fast developing halal food production and progress on halal certification1.
West Asia, with consumers having high disposable incomes, makes it a potential market for not only halal products but also services, particularly travel and tourism. Tourism packages have been developed which cater to the needs of the West Asian tourists. With limited domestic agriculture, the expanding local food production industry throughout the sub-region has been primarily based on meat, products, there is considerable room for expansion in the areas of non-meat, ready-cooked meal solutions, dairy products, baked goods, and cosmetics and toiletries. Limitations in the development of the halal industry in the sub-region include :
- lack of focus on developing domestic production in foods, since the economic development of many of the countries has been oil-driven; and
- limited or absence of infrastructure for domestic halal certification. Most halal products are imported. While certification is mandatory, in general any recognised halal certificate is acceptable1.
China
China with over 1 billion population and more than 100 million Muslims is the only country in the world which able to sustain economic growth rate in excess of 8 percent annually during the past 10 years. With greater revenue income now expected and discretionary consumer spending to significantly grow. With this current speed of rising income, China is expected to become the NET IMPORTER of food products, including Halal foods in the next decade, or by 2015. In the meantime, currently China is able to provide low cost raw materials for other Asian countries like Malaysia for further/ additional processing. For instance, Malaysia could buy Halal chicken meat as raw materials from China, value-add in Malaysia and re-export to Middle-East. Usually, the gain from value - added activities can be more than 50 percent margin rather than with use of locally produced raw materials3.
As China is able to provide certain cheap raw materials for now but in the next decade China will be a net importer of Halal Food, strategic opportunities abound for Asian countries like Malaysia to establish very good and effective collaborations and alliances such as joint ventures, contract manufacturing and other forms of strategic alliances to reap benefits from future growth and demand in Halal-related industries3.
India
India is the largest exporters of Halal buffalo meat in the world. The Indian companies such as Hind Agro, Allana Sons and Al Kabeer control more than half of the market share of the total production of Indian’ Halal buffalo meat ; India exports of Halal buffalo meat only destined to few countries like Malaysia, Philippines, Saudi Arabia, UAE and to lesser degree to Egypt and other small quantities to very few countries. However, in Saudi Arabia and UAE the sales of Indian buffalo meat is strictly for Indian and Pakistani foreign workers as the price are very much cheaper compared to beef products from Australia, USA, New Zealand, etc3.
Singapore
Product Market Survey by Matrade - "Singapore imported S$3.610 billion worth of Halal food in the year 2004. Please refer to Annex A for the detailed import statistics. 18.75 per cent of Singapore’s import of Halal food came from Malaysia in 2004. The value of total imports from Malaysia amounted to S$677.101 million in 2004." For more, please refer to Halal Market in Singapore (in PDF format)
Indonesia
Indonesia is the largest Muslim country with more than 210 million Muslims. However, it is not a major producing country. Indonesian Halal food output is mostly destined for local markets and only for products such as sashimi, canned tuna, frozen peeled shrimps are exported mainly to USA, Japan and Europe where Halal certification is largely is not a factor (not required) ;Indonesia is vital in the sense that the country is home to hundred thousands of SME’s and hundreds of large Halal-centric food manufacturers. At present, Halal certification is not mandatory – same as Malaysia – and it is only voluntary.
Majlis Ulama Indonesia (MUI) is the authority which release Halal certificate where the audit, inspection and assessment is done by LPPOM –MUI; Where there are hundreds and even thousands of Halal food manufacturers in Indonesia, even now as the awareness for cosmetics also in the rise3.
Thailand
Thailand is among the most advanced agro-food production country in Asia and thus, to many of their food manufacturers are willing to become Halal-compliant to capture the growing demand for Halal products.Thailand recently passed the Halal inspection by UAE Halal inspection team and thus, several largest Thai’s food producers are already approved to export to UAE and hence, to the whole GCC countries3.
Phillipines
Philippines may yet to become an important player in the Halal market. However, in mapping regional Halal Market potential, Mindanao is a potential contender as production centres for several Halal raw materials such as corn, etc for animal feed and the production of chicken meat, etc Also in the Halal pipeline business programs within the context of BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines; Eastern ASEAN Growth Area);
Autonomous Region of Muslim Mindanao (ARMM), a Muslim-majority province in southern Philippines has expressed its interest in playing its part in the Halal market. Saudi Arabia already pledged a grant of USD 1 million to assist ARMM to boost its Halal food industry3;
Australia
Australia is the leading producer and exporters of beef and the largest exporters of live sheep and meat of sheep (lamb/ mutton). The safe and green image of Australia, although at present is being challenged by New Zealand is seen by customers worldwide as assurance that their meat products have the highest quality and safety products. Australia also has the highest/ best situation on animal diseases accorded by the OIE, meaning that the country has the lowest possible animal disease such as FMD, Newcastle disease, BSE, etc. On this reason, Australia considered as 'safe' country. In terms of Halal, Australia is one of the leading exporters of Halal beef and Halal lamb/ mutton, such as those exports to Middle-East, Indonesia, Malaysia and many other countries (more than 40 countries). Australia also is the largest exporters of live sheep to Middle-East, including for Hajj purposes. Australia also is the only non-Muslim majority country which has an industry regulation concerning 'Muslim slaughter men', although New Zealand reportedly also has similar regulation in place, Australia is the first and most renowned. The existence of many Halal certification agencies and the willingness of Australian government to take Halal matters seriously - e.g. Meat and Livestock Australia (MLA - government agency to promote Australian meat products) promote Australian Halal meat aggressively in the Middle-East from its Bahrain office3.
| Other useful links : | New Zealand - For further reading |  |
The Halal market in Europe is made up of more than 50 million of Muslims with a substantial spending power of nearly USD77 billion in a year1. Whilst France has the largest number of Muslim population in Europe3. In United Kingdom (UK), for instance, the annual retail sales of Halal meat are valued at £400 million, according to the recently published UK Halal Market report by the UK Government1.
The European Muslim market is a significant market segment: estimates put it at 25-30 million and rising2. France is the only country in Europe where its Government has caveat the impact of the political power of Muslims in national governance and administration. Recently, French Muslims together with Halal-industry stakeholders and their Religious community have initiated a referendum for Muslims to have a single body to represent their interests in live matters such as education, access to financial system, availability of Islamic Banking, and centralized harmonization of Halal Certification standard , etc. The UK has a growing Muslim population of about 3.5 to 4 million with the largest concentration found in cities and region like London , West Midland such as Birmingham, Leicester, Manchester and Northwest Yorkshire and Humber3;.
The UK has a growing Muslim population of two million; while at five million or 8% of the population, France is home to Europe's largest Muslim community; and Germany has three million Muslim inhabitants. There are also sizeable Muslim populations in Belgium, Norway and Sweden, with Mohammad the first or second most popular boy's name in cities such as Brussels, Oslo and Malmo. Current population figures across Europe are impressive, but the growth rates are more so. Europe's Muslim population, even at conservative estimates of around 25 million, increased at a rate of 140% over the decade to 2005. Muslims make up less than 1% of the Irish population, but statistics show a 70% increase in the community's numbers from 2002-2006. Similarly, the number of Muslims in Austria increased 15 fold from 1971 to 2006, and Islam will overtake Protestantism as the country's second-largest religious group by 2010, according to a recent study from the Austrian Society for International Understanding, while Belgium's approximately 400,000 Muslims represent 4% of the total population2.
United Kingdom
Boast to have the largest Muslim community in Europe outside of France, the growth rate of Muslim population is higher than that of its domicile population. By 2050 , UK Muslim population is poised to equal its total Ethnic population ! The average purchasing power of Muslims in UK is relatively higher than that of Muslims in France. This is why there are far larger types of Halal products available in mainstream hypermarket such as Tesco, Sainsbury, etc, not only in London area but also in Birmingham, Mancester and even Dublin. UK Halal Food imports are valued at about £18B per annum. Amongst top EU exporters are Netherlands, Ireland, France, Germany, Spain whilst the four top east Asia exporters are Malaysia, Thailand, China, Indonesia. Major Halal products entry modes are found predominantly controlled by small specialist distributors based in ethnic community lines ; renown Oriental Supermarket chains like Wing Yip , See Woo, Hoo Hing and by other Major hypermarkets and supermarkets like TESCO, ASDA ,TAHIRA ,etc.Due to strict EU Meat & Poultry compliance and import, regulatory instructions , Halal food - meat - is produced by Muslim-ethnics community especially Pakistan's, India's, Turk's, etc. With lower cost-to- labor to slaughter, the production cost is relatively lower compared to non-Halal slaughtered meat . As such, many non-Muslim consumers buy these Halal meat products from hundred Halal butcheries found all over UK3.
Leading the way on the fast food front, McDonald's began serving Halal Chicken McNuggets and other food items permissible to Muslims, at one of its London outlets. Demand is strong, sales are increasing, and McDonald's is thinking about extending the experiment reported the Economist. Meanwhile, Boots, a UK chemist chain, is running a trial of Halal baby food in 30 stores2. UK is also important to Malaysia as the franchise program of Jom Makan - part of Malaysia Truly Asian Kitchen program under the 9th Malaysia Plan - launched in 2008 for the first time in London. (Jom Makan Kitchens are expected to grow to 200 franchised outlets all over Europe, Australia, and USA)3;. While Tesco, which like other supermarkets, sells Halal certified meat at some stores, is looking to include new products, such as ready meals2. Popular Halal-food Range Products are like Paratha, Sauces, Frozen Pastry, and Confectionaries. Malaysian companies exporting them are like Dewina Food Industries, Prima-Agri Products, KG Pastry, Kawan Food Manufacturing, Kart Food, PA Food, Ace Canning, Lingham3. The UK is the largest centre of Islamic banking and finance in the Western world. Its first specialist Islamic bank opened in 2004, and HSBC and Lloyds now offer Sharia-compliant mortgages and accounts. Lloyds' research shows over 75% British Muslims want banking services that fit with their faith, but they also want all the benefits they've come to expect from banks2.
Some useful links : Halal Food in Scotland, Food From Britain Buyer's Guide 2008, Imported Food U.K by FSA, Exports and Trade by Defra, Food From Britain
Product Market Survey by Matrade - "According to the official 2001 census, there were 1.6 million Muslim living in Britain. The Muslim Council of Britain (MCB), estimated the actual figure to be closer to 2.5 million in 2005, taking into account new immigrants, non-registration and unaccounted illegal immigrants. Muslims were the largest religious group after Christians. Muslims comprised 3 per cent of the total population. Around two-fifth of Muslims (38 per cent) lived in London. After London, the regions with the next biggest share of the Muslim population were the west Midlands (14 per cent), the North West (13 per cent), and Yorkshire and the Humber (12 per cent). Even within these regions, Muslims were highly concentrated spatially. Muslims made up 8 per cent of London’s population overall but 36 per cent of the Tower Hamlets and 24 per cent of the Newham populations". For more, please refer to full document of Halal Market in UK (in PDF format).
France
Product Market Survey by Matrade - "Halal market in France is valued Euros 3 billion. The Muslim population, living in France is estimated at 7 million people, of which 70% are origins of the Magreb countries (Algeria, Morocco, Tunisia), while others are from Turkey and diverse African Muslim origins, Comores Islands and Senegal. Muslims in France spend 30% of their total income on food. They purchase halal food products several times per week and about 37% of them spend between €150 - €250 per week." For more, please refer to full document of Halal Market in France (in PDF format).
France has the largest number of Muslim population in Europe. In retrospect, France is considered as 'trend setter' for Muslim in other European countries. Although the characteristics of Muslims in France is different compared to Muslims in Germany and other countries (e.g. In Germany, the Turks represents more than 70% of Muslims while in France the North African Muslims such as Moroccans, Algerians and Tunisians represent about 80% of total Muslims in France). Interestingly, the combined purchasing power of these about 7 million Muslims in France is almost equal to the combined purchasing power of Muslims in Indonesia plus Malaysia , Philippines and Thailand. The average/ median income of Muslims in France is approximately between Euro 18,000 - Euro 22,000 per year or USD 30,000 - 35,000/ year, which is ten times higher than that of Indonesia and about 5 times higher than that of Malaysia. A point in fact is that most of Halal food manufacturers in Europe is either located in France or UK, and only recently in the Netherlands. Many France 'normal' companies such as Doux (one of the largest chicken meat producers in Europe) has a dedicated Halal –meat slaughter and production line3. France also actively exports Halal chicken meat to many Muslim countries. It is estimated that more than 70 percent of the total France exports of frozen chicken meat is Halal certified (e.g. Halal frozen whole chicken, Halal frankfurters: Doux, Tilly Sabco, etc) and a significant majority of this is exported to Middle-East/ GCC countries especially to UAE, Saudi Arabia and Kuwait3. To cater to the sensitivities of affluent Muslim consumers, manufacturers of gourmet foods are producing Halal foie gras2.
Netherlands
Netherland is considered the 'gateway' to Western Europe. About 70 % of the total imported consumer goods imported to Western Europe pass through the Netherlands, especially vide Port of Rotterdam. Netherlands is also a 'melting pot' in the sense that this country attract among the highest number of tourists that come from all over the world. Countries like Thailand put a lot of commercial focus in the Netherlands. The Thais understand, that success in promoting and selling their Thai food products in the Netherlands, will translate into an almost guaranteed ticket for successful en try into virtually any country in the Western European hemisphere. A case in thought indeed. Halal-related business particularly foods, is abound. With about 1 million Muslims and growing, Netherlands offers opportunities in the various Halal industries particularly foods. Strategically located, it also offers one of the best investments location in terms of joint ventures, re-exports, etc. Netherlands is well known as the logistics nerve centre of Europe. It has operational Halal warehouse, transport and distribution services to cater for Malaysian and other Asian Halal products. With ready and able service platforms, Malaysian companies can benefit to take advantage of rising demand for ethnic food (e.g. Chinese food, Thai food, Indian food, etc) . Malaysia can position and offer its Truly Asian food concept with availability of Malaysian Halal market centers. The use of such dedicated Halal logistics facility will enhance and strengthen Halal integrity for Malaysian halal consumables products export into Europe3.
Turkey
Turkey, boasts to have many large food exporters. Many Turkish products are exported to more than 40 countries in the world particularly in countries where Turkish immigrants live. There are large numbers of Turkish population in EU countries. For example, in Germany, about 70% of total immigrants are from Turkey where in France the proportion is about 30%. Thus, Turkey and the Turkish pe has quite influential in determining and influencing the trade and distribution channel of Halal products in these countries3
Gulf Cooperative Countries (GCC)
GCC is the largest importers of Halal products in the world, especially Halal meat. The six member countries of GCC - Saudi Arabia, UAE, Kuwait, Qatar, Bahrain and Oman import close to 1 million MT of Halal poultry meat and more than 200,000 MT of Halal beef. Although Saudi Arabia imports are higher than UAE, but UAE - particularly Dubai considered as the gateway to enter the larger GCC and even the whole Middle-East and North African countries. It’s worth to mention that major companies in UAE such as Al Islami, Al Kabeer, Al Areesh, etc involve heavily in re-exports activity to other third countries, such as other GCC countries and also to Iran, North Africa and Central Asian countries (Armenia, Turkmenistan, Kazakhstan, Uzbekistan, etc). Some UAE companies even exports about 70 to 80 percent of their total production to third countries, specifically to take benefits from import duty exemption. Dubai traders also have very in depth knowledge about market situation, regulations and consumer preferences in its neighbouring countries and other countries in Middle-East and Central Asia, which make them easy to do business and export to these countries. For Malaysia, Dubai is very important as consumers in Dubai is highly 'adventurous' in the sense that they are willing to try and buy new products, including 'ethnic' food products.
Malaysia, has a good standing in Dubai/ UAE and the whole Arab countries. This makes easier opportunities for Malaysian products to be known by consumers in Dubai/ UAE/ GCC countries. Dubai is the main gateway to other Middle-East and Central Asian countries. Asian countries like Malaysia’s ability to 'capture' Dubai market, makes it easier to make inroads with greater market access into much larger Arab's markets like Saudi Arabia, etc3.
Other useful links : Middle East Analysis, Trends and Insights, Consumer Behavior and Demographics, Penetrating Middle Eastern Market - A Practical Perspective
Saudi Arabia
Product Market Survey by Matrade - "Saudi Arabia has a 100% Muslim population of which, 90% are Arabs, and remaining 10% are Afro-Asians. Its population is 22.7 million, grows on average of nearly 3% annually. Furthermore, Saudi Arabia continues to be the single largest market for food and beverage products in the Gulf, accounting for 63 percent of all of the region’s imports. Saudi Halal food market is estimated to value at US$5 billion annually". For more, please refer to Halal Market in Jeddah (in PDF format).
North America & Latin Countries
USA & Canada
USA and Canada imposed a very strict import regiment for food products and thus, it is almost impossible to export food (Halal) to USA and Canada. Even Thailand is not allowed to export many food (Halal) products to USA due to to very strict sanitary-compliance and phyto sanitary regulations. Perceived as a trade barrier, Brazil has already lodged an official protest to World Trade Organization (WTO, as Brazilian products find difficulties in exporting to the USA3.
Although the number of Muslims in USA is high, approximately 6 million; nevertheless, they are scattered all over the USA. This makes logistics and distribution of the product become more difficult and expensive3.
At present, several large US meat exporters such as Tyson Foods, Pilgrim Pride , Purdue Farms , and Midamar Corporation, have small production and process centers for Halal products, especially chicken leg quarters and frankfurters at affordable prices. There are Halal retail chain shops found in the Midwest, owned by Midamar , that sell these meat and meat-derivative products like cold cuts, nuggets, etc , products. However, many importing countries are sceptics in the ‘ Halalness ‘ resulting in import restrictions of these meat from USA3.
Other useful links : US Exporters Guide to Europe
Brazil
Brazil is one of major agribusiness powerhouses in the world and the biggest exporters of Halal meat - especially Halal chicken meat to the world. Total exports of Halal chicken meat from Brazil is more than 1.3 million MT and most of this being exported to GCC countries3.
Brazilian Halal exporters have realized the multiplier economic –impact to have a dedicated Halal-compliant production and processing centers. Such as in the case of Perdigao, the largest exporters of Halal meat from Brazil3.
Brazil has the lowest production cost of Halal chicken meat and Halal beef in the world. Thus, it is important for ASEAN countries like Malaysia, to open-up its market for Brazilian meat-based and meat-products, for value-added re-exports to third countries, possibly to the GCC countries, etc3.
References
1The Third Industrial Master Plan 2006 - 2020, Ministry of International Trade and Industry Malaysia
2Spotlighting Europe's Muslim consumers - Euromonitor International
3HDC International Business Development Department (IBD)
- Malaysia External Trade Development Corporation (Indicated as Product Market Survey)
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