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Kuala Lumpur - The storm of bad publicity that hit confectioner Cadbury in Malaysia after its chocolates tested positive for traces of pork highlights the costly, religious minefield food companies must navigate as they rush to tap the surging $1trn global halaal market.
One of the biggest headaches for corporations like Mondelez International, Nestle and Unilever is the lack of a unified standard for what exactly is halaal, or permissible under Islamic law, despite years of efforts by Muslim authorities to come up with a global benchmark.
As a result, 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.
"Obviously it's not good to have so many standards. It's confusing," said Jamil Bidin, the chief executive of Halaal Industry Development Corporation, an agency linked to Malaysia's government.
Muslim-majority Malaysia is regarded by many Muslim countries as a global leader in halaal food processing due to its established certification experience and developed industry.
Islam requires practicing Muslims to consume halaal products, and, at its most basic, that means foods and drinks that do not contain any alcohol or pork. To be deemed halaal, livestock must be slaughtered as the name of Allah is invoked.
Big food firms have been ramping up their investment and expertise in halal, eyeing a fast-growing Muslim population that is forecast to add a billion people by 2050 with rising education and income levels.
The market to process, produce and distribute halaal food and drinks will grow into a $1.6trn industry by 2018 from about $1trn in 2012, according to DinarStandard, a research firm specialising in Muslim markets.
But industry executives say the lack of global or regional benchmarks is stunting the industry's potential at a time when countries such as Japan and Australia are jumping on the halal bandwagon to cater to a rising number of Muslim travellers.
"We welcome efforts to ensure consistency in halal certification and would support a global standard, or perhaps wider regional standards, to help simplify the landscape," a spokesperson for Cadbury's parent firm Mondelez said.
Emotive topics
Halaal standards are emotive topics in Muslim countries, as Cadbury's recent problems in Malaysia showed.
Several Muslim consumer groups 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 furore and prompted several rounds of testing by authorities from neighbouring Indonesia, home to the world's biggest Muslim population, to Saudi Arabia, the birthplace of Islam.
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 halaal.
But the incident has sparked a heated debate among Islamic scholars in Malaysia over whether substances derived from pork such as gelatin can be considered halaal.
"We expect there wouldn't be a repeat of such an incident as this could ruin the halaal industry, in Malaysia especially," said Othman Yusoff, chair of the halaal committee of the Federation of Malaysian Manufacturers.
Domestic politics and vested interests have also proved to be a stumbling block so far.
The 57-member Organisation of Islamic Cooperation (OIC), which calls itself the collective voice of the Muslim world, is trying to draft global halaal guidelines with the backing of Dubai, Turkey and Saudi Arabia.
But that movement, the Standards and Metrology Institute for the Islamic Countries (SMIIC), does not include Malaysia and Indonesia - home to large halaal-certification centres.
"What is critical is that there is interoperability among standards, and transparency," said Rafi-uddin Shikoh, chief executive of New York-based consultants DinarStandard.
"An exporter intending to export food from Sudan should know and deliver easily the halal certification requirements from almost any market they feel they can grow in."
Problems with rivalries
Defining what exactly constitutes halaal is an issue of hot debate among Islamic scholars, which makes agreeing on a global standard difficult.
For example, more conservative interpretations hold that each animal must be slaughtered by a hand-held knife.
Britain has two main halaal certification boards with conflicting stances on whether animals can be stunned before slaughter.
The kingdom of Brunei, which has a strict interpretation of Islamic rules, sends auditors to neighbouring Malaysian factories to check imports for halaal-worthiness.
Another factor complicating the search for a single standard is the intense rivalry between countries for a slice of the industry.
US cereal maker Kellogg and chocolate maker Hershey, for example, are building halaal-compliant plants in Malaysia, with investments of $130m and $250m respectively.
Dubai is setting up testing and certification centres to profit from the halaal business. Malaysia has been pushing its own standards, as has Turkey.
"It's silos," said Darhim Hashim, the director of the International Halaal Integrity Alliance, which is working with the OIC to create common standards. He said one way forward would be for the Gulf countries, Malaysia and Indonesia to agree minimum standards.
"I think naturally the rest would follow - those are the key markets, the most regulated import markets."
