Indonesia Needs to Improve Halal Certification Standards

Bogasari

Halal certificates for 50 MSMEs Mie Mitra Bogasari were handed over by the Deputy Head of the Bogasari Division to Atok Sudirman, the owner of the Atok Sudirman Chicken Noodle business at his business location in Cilincing, North Jakarta, on Tuesday (12/23/2020).

JAKARTA, KOMPAS — The growing consumption of halal food around the world has offered great potential for Indonesian industry players, especially those from the food, beverage and fashion sectors. However, Indonesia needs to improve its halal certification standards to use market intelligence and provide better export data to gain a bigger share in the international halal food market.

The State of Global Islamic Economy Report 2020-2021 predicts the world halal food consumption will increase from US$1.17 trillion in 2019 to $1.38 trillion in 2024, while global Muslim fashion spending is projected to grow from $277 billion to $311 billion in the same period. The consumption of halal products is predicted to further expand, including in non-Muslim countries.

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The chairman of the Association of Indonesian Food and Beverage Entrepreneurs, Adhi S. Lukman said, in the future, the consumption of halal products would no longer be tied to one\'s religious status. Many non-Muslim countries have begun to actively seek and promote halal products, he said. Apart from having great economic potential, halal products are synonymous with excellent hygiene and safety standards.

“The verification of halal certification is very detailed. The process from upstream to downstream is carefully checked to ensure the products are safe, clean, hygienic and environmentally friendly. So, halal products must be safe, healthy, and ethical. It will become a global phenomenon, meaning that market potential is quite will be even greater,” said Adhi when contacted in Jakarta, last weekend.

Lagging behind

In this case, Indonesia actually needs to be more aggressive in overcoming its backwardness. Despite being among the top five largest consumer countries of halal products, Indonesia has not become a major exporting country. Indonesia is lagging behind in various sectors, from food, beverages, fashion, cosmetics, to pharmaceutical products. In short, Indonesia, instead, still becomes a big market for halal products from other countries.

YOLA SASTRA UNTUK KOMPAS

A number of MSME products were exhibited at the halal certificate handover event in Depok, West Java, Thursday (31/1/2019).

For example, Indonesia is the largest halal food consumer country with the total spending of $144 billion. However, Indonesia is not among the top five halal food exporting countries to Muslim countries (Organization for Islamic Cooperation/OIC).

The food and beverage industry also grows by an average of 8.16 percent a year.

In fact, exports of Indonesian food and beverage product are relatively high. In 2020, despite the pandemic, food and beverage exports reached $31.17 billion which accounted for 23.78 percent of the total export value of the non-oil and gas processing industry. The food and beverage industry also grows by an average of 8.16 percent a year.

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The founder and director of PT BeeMa Boga Arta, Fransisca Natalia Widowati, said halal certification had become one of the main problems faced by the country’s halal food and beverage producers when exporting their products to the global halal food market. According to her, the Indonesian halal certification has not received international recognition in a number of countries.

The difference in standards makes it difficult for exporters to enter the global halal market. Moreover, halal products are not only assessed from the final processing but from the upstream and downstream, from the use of raw materials to the packaging of finished goods. “As the result, there are often problems during assessment," said Fransisca.

The government also needs to improve data collection on the export of halal products. According to Adhi, Indonesia had, actually, exported a lot of halal products, but many of them were not recorded. "I believe exports of halal food account for 80 percent of our total food but the data documentation is bad. So, it is not known how many halal products are exported. We only have data on exports to OIC countries," he said.

KOMPAS/ISMAIL ZAKARIA

Employees make cookies in the production room of the Nutsafir Lombok business, which is engaged in processing food made from local agricultural grains in West Nusa Tenggara (NTB) in Mataram, Thursday (1/7/2021).

Indonesia\'s marketing intelligence strategy has also been weak so far. As a result, industry players do not have reliable and up-to-date information about the types of halal products that are needed in other countries. The director general of Small, Medium and Multifarious Industries of the Industry, Gati Wi-bawaningsih, confirmed that data collection and intelligence information on the global halal product market remained weak . According to him, inter-ministerial coordination needs to be improved in order to strengthen the efforts in raising the country’s exports of halal products.

(This article was translated by Hendarsyah Tarmizi).