Wednesday, November 26, 2014

Regulating the sacred: why the US Halal Food Industry needs better oversight

For many Muslims, adherence to Islamic dietary laws, known as halal, is an intrinsic part of their everyday lives. Even those who are relatively lax with other rituals of the faith tend to adhere to halal. But a spate of scandals involving halal meat – first in Europe and now in the US – threatens the reliability of the industry and highlights the need for improved oversight.
There are 1.6 billion Muslims around the world who collectively support a market for halal foods that is currently valued at more than US$1 trillion. The demand for halal products from countries like the US is certain to grow because a large number of Muslim-majority countries do not have enough agriculture and livestock resources to feed their booming populations. Saudi Arabia, Qatar and the other Gulf Cooperation Council countries, for example, are expected to import US$53 billion of halal food by 2020.
The superior quality of its products has made the US a leader in the global market for food prepared by Islamic standards. But increasingly it is facing stiff competition from both established and emerging players like Canada, Australia, New Zealand, Russia, Brazil and Uruguay. In order to maintain its competitive edge, the US needs to bolster its halal-assurance mechanisms. This is necessary not only for the export market but also to instill confidence among the millions of domestic halal consumers in America.

The Midamar controversy

Last month, Bill Aossey Jr, founder of Cedar Rapids, Iowa-based Midamar Corp, was indicted on 19 felony counts for allegedly shipping mis-branded meat to Indonesia and Malaysia from 2007 to 2010. He is accused of making false statements on export certificates and committing wire and money fraud. Indonesia and Malaysia have strict halal import regulations that require that the meat be processed only at their approved slaughterhouses. Aossey Jr has been accused of shipping beef from a Minnesota plant that had no such approval from the two importing countries.
Midamar insists that it was a minor labeling issue and that the meat it shipped was halal. Its lawyer criticized the government for initially accusing the company of not being compliant with halal rules but later retracting that allegation. He also accused the government of ‘improperly trying to define halal standards’. Defining what is halal or not should be left to the Muslim faithful without governmental interference, he appears to be saying.
The controversy surrounding Midamar is emblematic of the issues plaguing the industry. Unlike the Kosher food sector, there is no widely accepted golden halal standard in the US or even internationally. Despite some initiatives taken by the Organization of Islamic Cooperation, a universal standard has yet to emerge. While all Muslims agree on the fundamentals of Islamic dietary laws, as mentioned in the Quran, there are significant disagreements when it comes to the details.
Unlike kosher, there is no universally recognized standard for proper halal food preparation. But there are a few minimal consumer expectations. Reuters
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Mechanical versus manual slaughter

Some of the contentious issues include: the permissibility of stunning an animal, mechanical versus manual slaughter, vertical versus horizontal cut, permissibility of minute quantities of alcohol as processing agents, and the list goes on. Adding a further dimension of complexity is the growing awareness among Muslims that the food they consume should not only be halal but also ethical. Proponents of this movement highlight issues such as the humane treatment of animals and the use of genetically modified organisms.
As a result of this lack of consensus, the definition of halal can be as expansive or as restrictive as one wants it to be. This obviously poses a problem for food manufacturers frustrated by the diversity of opinion and unable to adhere to a set standard. But despite the disagreements, the average Muslim consumer has come to expect some basic standards. At a minimum, halal signifies that the permissible animal or bird has been slaughtered by a Muslim; that it is alive at the time of the slaughter; that a ritual blessing is invoked; and that the blood is completely drained out.
But this diversity of definitions creates a large loophole for fraud. Businesses and individuals have charged premium fees for generic meats they incorrectly labeled halal. Several private halal certifiers do provide some oversight of the industry but that has proven to be inadequate. The fact that there are no regulations governing the certifiers means that anyone can claim to be one. This has led to the mushrooming of scores of “certifiers” with little or no religious or technical expertise. A related problem is that of self-certification by the companies. This essentially makes the whole exercise redundant as then there is no third-party oversight.

Fragmented and haphazard

The US government’s regulation of what constitutes halal works in a fragmented and haphazard manner. The Department of Agriculture oversees federally regulated plants and also inspects exporters to ensure that they meet the importing country requirements. Since 2000, eight states have also enacted their own halal consumer protection legislation similar to the ones that were designed for kosher consumers. But the scope of these laws is often vague and poorly implemented. Cutbacks in the public sector has led to an acute shortage of inspectors, making them effectively toothless. But there have been rare cases when the authorities did crack down on those indulging in fraud. The Orange County District Attorney, for instance, obtained a US$527,000 settlement in 2011 from a business which was fraudulently selling selling generic meat as halal.
In order to protect both the consumers and the reputation of the industry, it is vital that a holistic approach be adopted involving all stakeholders. There are obvious limitations to governmental involvement due to the separation of church and state principle. But it can certainly improve transparency and consumer information by mandating that anyone selling a product as halal should back up that claim. The disclosure requirements of New York’s Halal Food Act of 2005  if strictly implemented, which they are currently not, could serve as a good model. The government can also regulate the certifiers by imposing a minimum set of standards including qualifications and avoidance of conflict of interest.
Bureaucratization and professionalization of the halal certifiers at a minimum will greatly improve reliability – as it has in the kosher industry – if not completely eliminate fraud. A transparent and reliable American halal industry is good not only for consumers but also for businesses.

Thursday, November 20, 2014

Shariah Food demand shows Halal stock promise

Eight years ago, Taleb Mohamad Almahmoud started importing a non-alcoholic beer popular in the Middle East to Malaysia. Now he's bringing more than 300,000 bottles of Dubai-brewed Barbican into the country a month.
"There are many Arabs here and they like the drink because there's no alcohol," the Syrian-born Almahmoud said in an interview near his shop in downtown Kuala Lumpur that also stocks spices, couscous, pickled olives and Turkish coffee. "Malaysians like it too."
The popularity of halal products such as Barbican that comply with the Koran's tenets helped drive a 4.6 per cent gain in the SAMI Halal Food Index of shares this year, beating the 0.2 per cent rise in the Bloomberg World Food Index by miles.
The industry's expansion is also flowing through to debt markets, with the Malaysia International Islamic Financial Centre estimating companies involved in Shariah-compliant food, textiles, tourism and healthcare have sold $US5 billion of sukuk - the Islamic equivalent of bonds - to date.

The outlook for the $US2 trillion ($2.3 trillion) global halal industry that also includes fashion and entertainment is underpinned by a worldwide Muslim population that the Pew Research Center sees growing at twice the rate of non-believers through 2030.
Demographics like that have lured the world's biggest food company Nestle, which markets Shariah-compliant noodles and breakfast cereals.
'Obvious conduit'
"Halal is a huge industry and the growth rate is massive," said Baiza Bain, a director at Islamic finance consultancy Amanie Advisors in Melbourne. "Companies are making sure that they adopt the inclusiveness policy that will broaden their market."
Spending by Muslim consumers on halal products and services worldwide is forecast to increase by more than half to $US2.47 trillion by 2018 from 2012, according to the Kuala Lumpur-based MIFC.
Nestle (Malaysia) ships its products to more than 50 countries and may soon start exporting to Europe and South America, said Zainun Abdul Rauf, executive director for corporate affairs.
Sukuk sales
The share price of the company, which set up a 700 million ringgit ($242 million) sukuk program in 2003, has risen 0.9 per cent this year, faring better than Malaysia's benchmark stock index with its 2.3 per cent drop.
Worldwide sales of bonds that comply with Islam's ban on interest have increased tenfold in the last decade. Issuance has reached $US39.9 billion so far this year, 13 per cent more than at the same point in 2013, data compiled by Bloomberg show.
Ajinomoto, Japan's third-largest food company, sells Shariah-compliant food seasonings and drink sweeteners. The Asian nation and Spain have held halal summits this year to explore ways to develop the industry, while the UK plans to set up a business park to produce Shariah-compliant meat, according the MIFC report.
As well as prohibiting products that include alcohol and pork and banning gambling, Islamic tenets require that animals be slaughtered in a particular way accompanied by the recitation of a prayer.
Huge demand
Halal Industry Development Corp., a Malaysian government agency, estimates the global industry excluding financial services exceeds $US2 trillion and will grow 4 per cent to 5 per cent annually. Demand for Shariah-compliant products will come from established centres such as the Middle East as well as emerging markets including India, Pakistan and Bangladesh, said its chief executive, Jamil Bidin.
"The global demand is huge," he said. "Many non-Muslim countries are participating in this because they see that halal is big business."

Monday, November 17, 2014

Distance Learning Post Graduate Diploma in Halal Industry

Halal Research Council is pleased to offer “Post Graduate Diploma in Halal Industry”. This program is highly structured, interactive and innovatively designed distance learning program with an interactive methodology taught under the supervision of Halal industrial experts, Shariah scholars and technical professionals of various national and international universities, research and technical Institutes and Government agencies.
After the completion of courses, the students will have a comprehensive understanding about the concepts of Halal mechanism and certification of Halal and the prospects of Halal knowledge.

Thursday, November 13, 2014

Global Halal Food Standards must be Consistent

Ongoing developments include certification, accreditation and standard setting

Halal food sector across the globe will need to be integrated through uniform standards. This was endorsed by food experts at the 9th Dubai International Food safety conference on Tuesday.
“The halal food sector is poised for significant growth over the next five years. Current estimates suggest that the global halal food segment is worth around $667 billion and accounts for around 20 per cent of the global food trade,” said Khalid Sheriff, director food control department at Dubai Municipality. “Such huge amounts of foods require applying uniform and harmonised standards and regulations.”
Khalid was speaking at the second Halal Food Symposium. He stressed on how the Halal food industry will soon be the turning point in Dubai’s economic development.
“As Dubai aims to be the ‘capital of the Islamic economy’ in two years, many initiatives are being prepared at the federal and local levels to cater for the need to establish laws and regulations related to halal foods.”
The initiatives range from updating existing standards to drafting new ones to fill any legislative gap, and to harmonise regulations globally.
The ongoing developments in the halal food business include certification, accreditation and standard setting.
Representatives of various regulatory and statutory bodies from all around the world, especially Islamic countries and the countries that export foods to Islamic countries were among the participants, in addition to international organizations and private institutions.
Amir Sakic, Halal food expert, Agency for Halal Quality Certification, Islamic Community – Bosnia and Herzegovina, spoke about how to tackle the issues in halal food business, trends and experiences, while Dr Abdallah Belal Adam, Leader of Halal Meat Research Group, University of HAIL- Kingdom Of Saudi Arabia, shed light on the halal meat authenticity, new analytic methods in differentiation between halal and non-halal meat.

Monday, November 10, 2014

Halal food Production Launched in Balkans

In a bid to fight against economic crisis, producers in the Balkans turned towards halal food targeting both Western and Muslim countries markets, as demand for such products is constantly growing.
“Halal market represents more than one billion people across the globe. It is a young market with an important purchasing power and whose demand grows between 10 and 20 percent yearly,” said Amel Kovacevic, one of the organisers of a halal food fair in Sarajevo.
The three-day fair, that opened on Wednesday, is the first of its kind in the Balkans and it hosted some 30 producers from the region.
They came with their meat products, cheese, sweets, pastry, oils and halal cosmetics.
The Balkans region is well located in the Mediterranean basin which enables it to target both Western and Muslim countries market, Kovacevic said.
“In this economic and financial crisis that puts into question the existence of many companies one has to profit from the fact that we are in the very middle, between the East and the West.
“We have clean land and air and unexpensive labour force. It is a chance for economic development of this region,” he concluded.
In 2009 global halal food market was estimated at some $635 billion (490 billion euros) according to the “World Halal Forum.”
“Halal should not been seen as something that will immediately accelerate production and make profit grow in a day,” Asim Bajraktarevic, in charge of production in a processed meats factory, told AFP.
“It is the way to improve the quality of products and create conditions for growth once we enter foreign markets,” the young man added.
The Brajlovic factory, near Sarajevo, with a capacity of some 15 tons of products daily, obtained its halal certification three months ago. It is among some 150 food producers in the Balkans region that decided to respect same production norms for more than 2,000 products.
The number of both companies that obtain halal certifications in the Balkans and their products grow between 30 and 40 percent yearly while their turnover is currently estimated at some 550 million euros ($708 million), Amir Sakic, head of an agency for halal certification in Sarajevo, said.
Halal, an Arab word meaning “lawful,” refers to all things and actions permitted by Koran to practising Muslims, notably to a ritual to slaughter an animal, only a herbivore, that has to be conscious when slaughtered and its body should by drained of blood.
Also at the time of slaughter the phrase “bismallah” or in the “name of God (Allah)” should be pronounced by a practising Muslim, Sakic explained.
“For me it is very important to have a possibility to buy products with halal certifications since I respect recommendations of the Prophet Mohammed that ban pork and its by-products,” assured Mirza Suvalija, a pensioner wearing the Islamic veil, who visited the fair.
Sakic’s agency, that is referential in the region, was founded in 2006 with help of local Islamic community in the country where Muslims are majority while the others are Orthodox and Catholic Christians.
Muslims make up some 40 percent of Bosnia’s population of some 3.8 million, but most of them are not looking for halal-labelled products. Also, purchasing power is rather low and regional producers focus their hopes elsewhere.
A large number of companies that demanded to be given halal certifications are from Croatia, Serbia, Montenegro and Macedonia, neighbouring countries where Catholic and Orthodox Christians are majority.
“We export our products to some twenty countries. This year we obtained halal certification and it helped us a lot to increase our sales, notably in Scandinavian countries,” said Kalin Babusku, an official of the Macedonian factory “Mama’s.”
The factory produces jams and “ajvar,” a kind of seasoning based on pepper, egg-plant and garlic, a product very popular throughout the Balkans.
“Before obtaining the certification we were exporting to Sweden a truck of products every three months. Now we export a truck monthly,” said Babusku who was presenting “Mama’s” products at the Sarajevo fair.