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Last Updated: Sep 25th, 2006 - 11:36:04 |
Aug. 10 (Bloomberg) - Juma'atun Azmi, organizer of the first World Halal Forum in Malaysia in May this year, didn't want to host yet another scholarly debate among Islamic clerics about what the Koran does or doesn't allow Muslims to eat.
So instead of the mullahs, she invited McDonald's Corp., Nestle SA, Rotterdam Port and Tesco Plc, the British retailer, to the conference.
The picture that emerged of a complex, potentially $581 billion global supply chain covering one in four of the world's people surprised even Juma'atun, managing director of KasehDia Sdn., a Kuala Lumpur-based consulting firm that in 2003 published the International Halal Food Guide series.
Islamic banking is one of the fastest-growing niches of modern finance. Shariah-compliant investments, which shun payment and receipt of interest and steer clear of alcohol and gaming, are estimated to be worth about $270 billion globally.
These assets are growing at about 15 percent annually. The business of Halal food, meanwhile, is nowhere near its potential. In fact, a big chunk of the Halal demand is leaking into kosher. Muslims account for 16 percent of the $100 billion-a-year U.S. kosher market, London-based food-market research company Mintel International Group Ltd. estimates.
"With only 1,000 Halal-certified products available, most of which are not on the mainstream supermarket shelves, many U.S. Muslims are buying kosher because they are not being offered Halal," says Juma'atun. There are 86,000 kosher-certified products in the U.S., she says.
To most non-Muslims, Halal just means "no pork". For Muslims, Halal is a way of life. Appreciating the religious requirements in all their complexity and accommodating them in a modern setting may be every bit as profitable as structuring Islamic derivatives.
Halal Logistics
Setting up a separate Halal meat section in a supermarket is simple enough. Tesco launched Halal products in 2004. The current industry practices, however, are far from perfect. For a start, there are too many certifiers -- 26 in Australia alone.
And yet, it is almost impossible for any retailer in the U.K. or the U.S. to guarantee that the Australian beef being sold as Halal on its shop shelves was slaughtered just the right way and has had no contact with pork in the long journey from abattoirs and warehouses on ships and trucks.
It is also an opportunity for the Rotterdam Port, which says it wants to position itself as "the Halal Gateway to Europe". That may be a savvy move. Some 3 million tons of Halal meat is consumed annually in that region.
Rules of Slaughter
As part of its plans, Rotterdam, the world's second-largest port, is building a dedicated warehouse for Halal products and has commissioned a handbook that would inform logistics companies of the exact religious requirements.
Defining benchmarks, and auditing compliance, is where things get difficult, according to Habib M'Nasria, who as the quality-assurance director of McDonald's Middle East has been instrumental in establishing Halal standards at the fast-food chain globally.
Egypt, Pakistan and Saudi Arabia don't allow poultry to be given electric shocks before slaughter. Malaysia permits non- lethal stunning, M'Nasria said in his presentation at the World Halal Forum.
Then again, Muslims are required to say a prayer in Allah's name as they kill the animals. But some countries allow the holy words to be played on tape to speed things up, even though the Koran forbids efforts to rush the slaughter.
Challenge and Potential
How does one reconcile the conflict between religion on one side and contemporary production lines on the other? And between modern notions of animal welfare - total numbness to minimize pain - and what the Koran prescribes and Muslims believe to be the most humane way to produce meat and poultry?
"We are yet to come up with industrial solutions to industrial problems," says Nordin Abdullah, executive director at KasehDia. Therein lies the challenge - and the commercial potential - of Halal.
"Modern production lines are not built to take Halal into account," M'Nasria explained in his presentation. "Therefore, how much are Muslims willing to pay for the proper setup to get the proper Halal?"
To get consumers to pay that cost, Halal needs to become chic, just like organic food. What is required immediately is one worldwide standard and one globally communicated logo, said Sullivan O'Carroll, managing director of Nestle (Malaysia) Bhd.
Alcohol Ban
With greater prosperity, mainstream Muslim consumers will demand more Halal - and not just in the meat they eat. The Web site of Rolling Meadows, Illinois-based Muslim Consumer Group says a vanilla fudge sundae isn't Halal because it contains vanilla extract, which uses alcohol. Marshmallow is prohibited because it uses pork gelatin.
This is just the beginning. Some cosmetic manufacturers have already decided to go Halal. There's anguish among Muslims about poor availability of Halal medicines.
Malaysia wants to be a "Halal Hub", much as it wants to be a premier center for Islamic finance, says Juma'atun of KasehDia, which has been asked to prepare a strategy that may be included in the government's new 15-year industrial master plan.
"We see the need for Halal to turn professional," Juma'atun says. "Malaysia has credibility as a modern, Muslim nation. There's a lot we can do in Halal logistics and value-added services."
Andy Mukherjee is a columnist for Bloomberg News. The opinions expressed are his own. He can be contacted at amukherjee@bloomberg.net
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