Interdisciplinary Journal of Research in Business Vol. 1, Issue. 5, May 2011(pp.

01-07)

Intention To Halal Products In The World Markets

Kambiz Heidarzadeh Hanzaee

Associate Professor
Department of Business Management, Science and Research Branch
Islamic Azad University, Tehran, Iran

Mohammad Reza Ramezani (Corresponding author)

Phd student of Marketing Management
Department of Business Management, Science and Research Branch
Islamic Azad University, Tehran, Iran
Faculty of Management & Economics
Ashrafee Esfahani Highway, ponak, Tehran
I.R.Iran
Tel: + 989121884724
E-mail: mh_ramezani@yahoo.com

ABSTRACT

Emphasis on the importance of halal products is now growing. It is fast becoming a new market force and brand
identifier and is now moving into the mainstream market, affecting and changing perception on how business
should be conducted, including from a marketing point of view. Halal is no longer just purely a religious issue.
It is in the realm of business and trade, and it is becoming a global symbol for quality assurance and lifestyle
choice. Halal products are those that are Shariah compliant, i.e. do not involve the use of haram (prohibited)
ingredients, exploitation of labor or environment, and are not harmful or intended for harmful use. The realm of
halal may extend to all consumables such as toiletries, pharmaceuticals, cosmetics and services including
finance. Halal is a typical credence process attribute, i.e. a quality characteristic that can hardly be evaluated
or ascertained by the individual consumer, even upon or after consuming the food. Nowadays, Muslims are
making their presence felt socially and politically and are requesting halal-certified food products. Currently, a
certain degree of assurance is provided by halal certification of halal products. There are two types of halal
certificates, and their duration depends on the type of food or beverage. Any individual Muslim, Islamic
organization or agency can issue a halal certificate, but the acceptability of the certificate depends upon the
country of import or the Muslim community served through such certification. With the complexity of
manufacturing systems and the utilization of all animal by products, any product consumed by Muslims may be
certified, whether the product is consumed internally or applied to the body externally. The halal certification
process starts with choosing an organization that meets the needs for the markets to be serviced. The halal logo
is an authoritative, independent and reliable testimony to support halal food claims. This conceptually-based
paper critically reviews and amalgamates a diverse range of literature concerning Islamic rules. The way that
organizations issue halal certificates for halal producers and use of the halal logo on products. In addition, the
paper utilizes necessary religion sources and legal documents. The halal concept (especially for foods) is truly
from the farm to the table, and requires nutritious items prepared from permissible ingredients in a clean and
hygienic manner. Muslim consumers are very similar to any other consumer segments, demanding healthy and
quality products, which must also conform to Shariah requirements. Halal certificate can play an important role
to assure consumers that the product has got the necessary conditions of halal product.

Keywords : Islam, halal, haram, Sharia'h, halal certificate, halal logo

INTRODUCTION

Religious commitment plays an important role in people’s lives through shaping their beliefs, knowledge, and
attitudes (Shabbir, 2010). Different religious groups such as Muslims, Christians, Buddhists, and others have
differing beliefs. These beliefs cannot be avoided when a society is analyzed (Fam et al., 2002). These religious
commitments and beliefs influence the feelings and attitudes of people toward consumption (Jamal, 2003). The

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“halal” concept is one of these commitments that play an important role in Muslims' consumption. Today, Islam
is the fastest-growing religion on earth, both by birth and adoption, with the muslim population estimated to
exceed three billion by 2010. With the global halal market estimated to be worth $150 billion a year and the
halal food industry pegged to grow at a rate of 2.9% annually (Asia Inc, July/August 2007), businesses should
indeed be tapping this growing market segment (Al-Harran & Low, 2008).

The realm of halal may extend to all consumables such as toiletries, pharmaceuticals, cosmetics and services
including finance. The concept of halal was taken for granted previously, as nations were generally self-
sufficient in food production. With the onslaught of global trade and changing lifestyles, non-Muslim countries
are dominating the trade of processed food and generally halal products. Currently, a certain degree of assurance
is provided by halal certification of halal products, which in any case can be issued by any of over 100 halal
certification agencies worldwide (The Halal Journal, 2008). Each organization has their own set of halal
standards and guidelines. The fragmentation is further accentuated when crossing national boundaries where to
date there is no functioning mechanism for mutual recognition between countries. The lack of proper regulation
of certification means that non-halal produce has unknowingly ended up on the plates of Muslim households
(IslamOnline.net, 2006).

Halal is no longer just purely a religious issue. It is in the realm of business and trade, and it is becoming a
global symbol for quality assurance and lifestyle choice (Jumaaton Azmi, 2005, Managing Director of KasehDia
Sdn Bhd as cited in IslamOnline.net, 2005). The halal concept (especially for foods) is truly from the farm to the
table, and requires nutritious items prepared from permissible ingredients in a clean and hygienic manner. In
relation to the halal certification, the procedures refer to preparation, slaughtering, ingredients used, cleaning,
handling and processing, right down to transportation and distribution. Halal food also adheres to stringent
standards in hygiene and sanitation, and must not be harmful to health (IslamOnline.net, 2006). The fact of the
matter is that Muslim consumers are very similar to any other consumer segments, demanding healthy and
quality products, which must also conform to Shariah requirements (Al-Harran & Low, 2008). McDonald’s in
Singapore can be seen as a prime example. It has seen an influx of eight million patrons a year after obtaining a
halal certification. Since being certified, "halal", KFC, Burger King and Taco Bell have all seen an increase of
20% in customers (Sabri, 2006).

Shariah law is shaped by Islamic teaching and rulings derived from the Quran (the Muslim holy book, the main
source and the arbitrator for Shariah law), and the Hadith (a collection of anecdotes of the Prophet Muhammad’s
life) for the secondary sources for the law (Al-Qardawi, 2001; Wiechman et al., 1996). Most of the time, the
narrations of life events of the Prophet Muhammad are treated in Islamic law as the details for the Shariah law’s
principles stated in the Quran. After the Prophet Muhammad passed away, the majority of Muslim scholars
(particularly the Sunni sect) established a new source of Shariah rulings to adapt the law to new issues that may
arise through time and across cultures. This source is known as fatwa. A fatwa declaration is a product of
Islamic scholars (ulama) interpreting and adapting Quranic verses and Hadith in respect to contemporary issues.
This process allows new rulings to be introduced into Shariah law, rather than explicit doctrines from the Quran
or Hadith (Wiechman et al., 1996). Basically, fatwa rulings can either permit or prohibit certain Muslim
consumers’ behaviors, such as purchasing, consuming or supporting products or brands (Muhamad, 2008).
Moreover, the ruling can be “conditional” or “unconditional” in that a prohibition or permission for certain
products or behaviors can have conditions attached. For example, fatwa rulings permit Muslim consumers to
listen to popular music as long as the music is in line with “Islamic values,” such as the audience is separated by
gender (Al-Faruqi, 1985).

LITERATURE REVIEW

Islam

The impact of religion on food consumption depends on the religion itself and on the extent to which individuals
interpret and follow the teachings of their religion. Most religions forbid certain foods (for example pork in
Judaism and Islam, or pork and beef in Hinduism and Buddhism) except for Christianity which has no food
taboos (Sack, 2001, p. 218). The consumption of animal products, and more specifically meat and meat
products, is most strictly regulated in cases where religious considerations prevail (Shatenstein & Ghadirian,
1997).

One of those religions with food prohibitions is Islam. “Islam” is an Arabic word which means absolute
surrender to Allah (God). In Islam, the source of power is Allah and all the creation (matter, energy, and life)
obeys his laws. The Islamic system of life is called Shari’ah. There are basic foundational keys of Islam

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(submission to the will of God): Iman (believe), Salat (prayer), fasting, Zakat (alms giving), and Hajj
(pilgrimage to Mecca). In Islam, forbidden things are named haram while permissible things are called halal.
According to Malik (2001), the Prophet presents himself as a practical man, giving guidance in every situation
related to human social life. He gives the practical shape of Adal (justice), honesty, and Ibadah (worship) which
are elaborated by his actions. The source of the Muslim’s knowledge is the Quran, Prophet’s acts and, Ijma
(accepted under the Shariah laws by consensus of opinion). Violating Islamic values is named a crime while
earning through halal (Shariah-compliant) is considered an act of worship. Riba (interest) is prohibited in Islam
and Muslims should not earn through charging interest. In addition, Islam prohibits earning abnormal profit
from business transactions and forbids the accumulation of wealth. Halal products are those that are Shariah
compliant, i.e. do not involve the use of haram (prohibited) ingredients, exploitation of labor or environment,
and are not harmful or intended for harmful use. Islam rules prohibit the consumption of alcohol, pork, blood,
dead meat and meat that has not been slaughtered according to Islamic rulings (Bonne et al., 2007).

Table1 goes here

Halal

Halal is an Arabic term meaning “permissible”. In English, it most frequently refers to food that is permissible
according to Islamic law. In the Arabic language, it refers to anything that is permissible under Islam (Kamali,
2003). Its antonym is haram. The terms halal and haram will be used strictly to describe food products, meat
products, cosmetics, personal care products, food ingredients, beverages and food contact materials. Which
foods are halal or which foods are haram is decided according to the Holy Quran and the Glorious Shari’ah
(Lada et al., 2009). Halal products are those that are Shariah compliant, i.e. do not involve the use of haram
(prohibited) ingredients, exploitation of labor or environment, and are not harmful or intended for harmful use.
Muslims are obliged by religion to clearly scrutinize products to make sure they are halal. In addition, they are
strongly encouraged by the Islamic teachings to shy away from consumables that are doubted. It is estimated
that 70% of Muslims worldwide follow halal standards (Minkus-McKenna, 2007) and the Global Halal Market
was $12 billion in 1999 (Riaz, 1999). It increased to $150 billion in 2001 and currently is reported as $580
billion (Al-Harran & Low, 2008). According to Hussaini (2004), 75% of Muslims would follow their dietary
rules in the United States, meaning that even after having migrated, most Muslims still choose halal products.
Undeniably, the Halal aspect is now accepted as a quality system worldwide that appeals to both Muslims and
non-Muslims as well (Ariff, 2009).

Nowadays, Muslims are making their presence felt socially and politically and are requesting halal-certified
food products (Riaz & Chaudry, 2004; Shafie & Othman, 2006).

Role of trust in halal credence quality

Credence characteristics of food have become very important to consumers (Brunsø, Fjord, & Grunert, 2002;
Grunert, 2006). Halal is a typical credence process attribute, i.e. a quality characteristic that can hardly be
evaluated or ascertained by the individual consumer, even upon or after consuming the food (Darby & Karni,
1973; Grunert, 2005). As a product characteristic, halal refers to the nature, origin and the processing method of
the food, which entails similarities with organic foods or foods produced considering animal welfare or
sustainability issues. These characteristics are not visible and cannot be validated by the consumer even after
experiencing the product, yielding potential quality uncertainty during the pre-purchasing stage. Therefore,
consumers have to rely on the seller or outside observers, and put their trust in the information source and
information received (Andersen, 1994). For instance, to buy meat, Muslim consumers' trust in halal meat relates
to the certainty about the process attributes (i.e. meat processing and handling leading to the halal status) and the
safety in terms of meat wholesomeness. There is a very strong link between slaughter method and health and
safety perception. The Islamic slaughter method is believed to lead to complete bleed-out of the animal whereby
consumers believe less bacterial contamination can occur, hence resulting in healthier meat (Bonne & Verbeke,
2006). Hence, it seems that one reliable institute can play an important role to issue a halal certificate for
suppliers, to assure consumers that the product is halal.

What is a Halal Certificate?

The halal certificate and logo not only guarantee Muslims what they consume or use is according to the Islamic
laws but also encourages manufactures to meet the halal standards (Ariff, 2009).
A halal certificate is a document issued by an Islamic organization, certifying the products it covers meet the
Islamic dietary guidelines. These include that the product does not contain pork or its byproducts, the product

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does not contain alcohol, the product does not contain prohibited food ingredients of animal origin, and the
product has been prepared and manufactured on clean equipment. Meat and poultry components must come
from animals slaughtered according to Islamic law (Mian, 2010).

Types of Halal Certificates and Duration

There are two types of halal certificates, and their duration depends on the type of food or beverage. The first
type of certificate is a site registration certificate, which signifies that a plant, production facility, food
establishment, slaughterhouse, abattoir or any establishment handling food has been inspected and approved to
produce or serve halal food. It does not mean that all food products made or handled at such a facility are halal-
certified. A site certificate may not be used as a halal product certificate.

The second type of halal certificate is for a specific product or a specific quantity. This certificate signifies the
listed product or products meet the halal guidelines formulated by the certifying organization. Such a certificate
may be issued for a specified quantity of the product destined for a particular distributor or importer. If the
certificate is for a specific quantity, it may be called a batch certificate or a shipment certificate. Meat and
poultry products, for which each batch or consignment has to be certified, generally receive a batch or shipment
certificate. The duration for which a certificate is valid depends upon the type of product. A batch certificate
issued for each consignment is valid for as long as that specific batch or lot of the product is in the market--
generally, up to the product expiration date or “use by” date. In a separate case, if a certified product is made
according to a fixed formula, a certificate may be issued for a one-, two- or three-year period. The product
remains halal-certified as long as it meets all the established and agreed-upon production and marketing
requirements between the company and the halal-certifying organization (Riaz, 2010).

Who is Authorized to Issue Halal Certificates?

Any individual Muslim, Islamic organization or agency can issue a halal certificate, but the acceptability of the
certificate depends upon the country of import or the Muslim community served through such certification. For
example, in order to issue a halal certificate for products exported to Malaysia and Indonesia, the issuing body
of the halal certificate must be listed on each country’s approved list. There are more than 40 organizations that
issue halal certificates in the U.S., but only five of them have been approved by the Majelis Ulama Indonesia
(MUI). Recently, Jabatan Kemajuan Islam Malaysia (JAKIM) culled down the list from 16 to just three
approved organizations. Some 50% of the ones previously approved and now delisted by JAKIM were not even
active in issuing halal certificates, according to JAKIM sources. The other delisted organizations failed to meet
JAKIM guidelines (Ariff, 2009).

Which Products Can Be Certified?

With the complexity of manufacturing systems and the utilization of all animal byproducts, any product
consumed by Muslims may be certified, whether the product is consumed internally or applied to the body
externally. Medicines and pharmaceutical products that are used for health reasons need not be certified.
However, knowledgeable consumers look for products that are halal-certified or at least meet halal guidelines.
The products that may be certified include:



Meat and poultry fresh, frozen and processed products


Meat and poultry ingredients


Dairy products and ingredients


Prepared foods and meals


All other packaged food products
Cosmetics and personal care products


Pharmaceuticals


Nutritional and dietary supplements
Packaging materials

Halal Certification Process

The halal certification process starts with choosing an organization that meets the needs for the markets to be
serviced. Many countries, like Singapore, Indonesia and Malaysia, have government-approved halal programs,
whereas the predominantly food-exporting countries have independent certification bodies. When targeting a
specific country, it is better to use an organization that is approved, recognized or acceptable in that country. If

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the market area is broader or even global, then an organization with an international scope is better. The process
starts with filling out an application explaining the production process, the products to be certified; and regions
in which the products will be sold/marketed, along with specific information about the component ingredients.
Most organizations review the information and set up an audit of the facility. At this time, it would be advisable
to negotiate the fees and have a clear understanding of the costs involved. In some cases, the cost may run into
thousands of U.S. dollars per year. During review of the ingredient information and/or the facility audit, the
organization may ask manufacturers to replace any ingredients that do not meet its guidelines. Generally, the
company and the halal-certifying agency sign a multi-year supervision agreement. Then, a halal certificate may
be issued for one year or for a shipment of a product. Overall, the process for halal certification of the food
products is not complicated (Ariff, 2009).

Use of Halal Markings

When a product is certified halal, a symbol is normally printed on the package to inform consumers. For
example, the Islamic Food and Nutrition Council of America (IFANCA) uses the crescent (see the January 2010
issue of Prepared Foods for the symbols and lettering noted here) symbol, which signifies “good for Muslims.”
There are several other symbols being used by halal-certifying agencies, like an Arabic letter, Arabic lettering
for the word halal or the actual word “halal.” However, products will be better accepted by the Muslim
consumer if the logo is from the local halal authority or, in the case of imported products, if it signifies a
reputable halal certification organization. In conclusion, there are many opportunities to tap a global halal food
market of 1.57 billion people. The halal logo is an authoritative, independent and reliable testimony to support
halal food claims. Furthermore, it provides 100% profit of greater market share: no loss of non-Muslim
markets/clients. The halal certification enhances the marketability of products in Muslim countries and markets
and requires a small cost investment, relative to multiple growths in revenues. Finally, the halal product’s image
is boosted to meet varied customer needs.

The expanding halal food market represents a significant opportunity for international food companies, not only
in Muslim countries but also, Rupert Sutton writes, in Western markets with significant and growing Muslim
populations among whom halal observance is on the increase. The halal market is spread across many countries.
With its roots naturally in the Middle East and Asia, it also extends to the significant Muslim populations in
Africa and China. There are also newer and rapidly growing halal markets in Europe where there are over 50-
million Muslims, while America and Australia are also witnessing significant growth in halal food sales. There
is also no reason why halal foods should just be consumed by Muslims. As Usmirah Anum Ahmad of baby-food
producer Petitgems puts it: "Halal means high quality, and strong food safety; we are not just targeting Muslim
consumers." Today, Muslims account for around 26% of the global population and this is forecast to increase to
28% by 2020. Research in France, which has the highest Muslim population in Europe, shows that Muslims
spend up to 35% of their income on food, a higher than average percentage, partly attributable to the fact that
Muslim family sizes tend to be larger. Nordin Abdullah, executive director of KasehDia Sdn Bhd, the organizer
of the World Halal Forum 2007, estimates that approximately 70% of Muslims worldwide are now following
halal standards and this is expected to increase. "Food items, which can legitimately claim to be 'halal', will win
the trust of Muslim consumers and become an important part of brand equity," says Abdullah. "An on-pack
halal logo is a sign of reassurance." However, the biggest challenge remains the lack of consistent global halal
standards. Little wonder, therefore, that the World Halal Forum 2007 made the aim of harmonizing the world
halal market its central theme. One slide presented at the conference showed 17 different halal logos. There is
also no global halal trademark. While countries like Malaysia, Singapore, Thailand and Australia have halal
certification systems, ironically some Muslim countries, such as Saudi Arabia and Turkey, have none as halal is
the norm rather than the exception. However, this creates difficulties for a company looking to export halal
foods to such countries. Imported foods may be assumed not to be halal so are arguably in greater need of a
reliable and easily recognizable certification system (Riaz, 2010).

REFERENCES

1. Al-Faruqi, L.I. (1985), Music, musicians and Muslim law, Asian Music, 17(1), 3-35.
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Bhd.
4. Ariff (2009), Importance of halal certification. Retrieved from
http://www.halaljournal.com/article/4262/importance-of-halal-certification

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5. Asia Inc (2007). The Brunei growth story: Brunei premium halal brand. July- August, p.82.
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Figure 1.

Table 1

Sources of Form of Authority Characteristics

Shariah law references/products

Independence
The Quran
Main reference
(Prime Source) Verse Allah (The God)
Final arbiter, Principal Guide

Muhammad pbuh Dependence on the Quran

Sunnah Hadith (The Prophet) Detailing the principle in the
(Prime Source) Quran
Ulama Dependence on both Quran and
Ijma’ (consensus) Fatwa (Shariah scholars) Sunnah, and precedents fatwa

Dependence on the Quran,

Ijtihad (personal Ulama Sunnah
judgement/opinion) Opinion (Shariah scholars) and precedents Ijma’

Source: Hashim and Mizerski, 2010