Time for Halal Products to Shine

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Waktunya Produk Halal Bersinar

Every day Indonesian people interact with products labeled halal. The number and variety of products labeled halal continue to grow over time. Not only in the domestic market, various producers of halal products in the country are also trying to penetrate foreign markets.

Currently, Indonesia is also striving to increase the coverage of halal-certified products and businesses. This is in line with the implementation of mandatory halal certification starting from October 17, 2024.

The obligation for halal certificate will apply to food products, beverages, slaughter products and slaughter services, raw materials, food additives and auxiliary materials for food and beverage products. Furthermore, goods that are used, used, or utilized by the public must also have a halal certificate.

The Halal Product Assurance Organizing Body (BPJPH) of the Ministry of Religion (Kemenag) noted that there were more than 2.1 million halal-certified products as of July 2023. This number is targeted to reach 10 million by 2024 .

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“The target is indeed ambitious. However, we are optimistic that it can be achieved,” said the Head of BPJPH Kemenag M Aqil Irham during an interview with journalists in Jakarta last week.”

Among the registered halal products, few are produced by micro and small businesses or products that are widely distributed in eateries and street vendors. The list of halal products seems to be dominated by packaged food and beverages that are more commonly found in stores or retail outlets.

Halal products domestically are generally considered ‘definitely halal’ by domestic market consumers. This makes business actors, especially micro and small ones, rarely have the desire to register their products for halal certification.

According to Aqil, many micro and small business owners assume that their products are halal and do not require certification as proof. Mobile beverage vendors, for example, argue that consumers know their products are halal even without halal certification.

In response to this situation, wider education and outreach regarding halal certification is considered important. Halal certificates will open up new market opportunities, prove quality assurance, and provide a sense of security for consumers. ”This also applies to products other than food. Moreover, now there are many who make halal products as a lifestyle, “said Aqil.

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The Special Staff of the Minister of Religion, Wibowo Prasetyo, explained that there are two schemes for halal product certification. First, through a business actor’s statement or self-declaration which is free of charge. This scheme applies to products that are not at risk and use materials and production processes that have been confirmed as halal.

Next is the regular schematic. This scheme is intended for business actors who require product testing. Submissions can be made via ptsp.halal.go.idor the Ministry of Religion Heritage application. For this service, micro and small businesses are charged IDR 300,000 and medium businesses IDR 5 million. Meanwhile, large business actors and those from abroad are subject to a fee of IDR 12.5 million.

The halal terminology is not solely owned by Muslims anymore. Halal has evolved into a product standard that can be met by anyone regardless of their religious background or beliefs. This phenomenon has also developed globally.

As the country with the largest Muslim population in the world, Indonesia is a large and suitable market for halal products. Although it has been labeled as a trade barrier, countries around the world are now establishing their own halal certification institutions.

Read also: Indonesia Has the Potential to Become a Global Player in the Halal Industry

As an example, imported beef from Australia must also be certified halal in order to enter the Indonesian market. “Another example, businessmen who sell wagyu beef will certainly have their products more easily accepted by Indonesian society if they are labeled halal,” said Aqil.

The State of the Global Islamic Economy Report 2022 notes that Indonesia is one of the world’s largest consumers of halal products. The consumption of halal products in Indonesia covers 11.34% of global halal expenditure. With a large demographic potential, society needs to be encouraged to use and take pride in domestic halal products.

Executive Director of the Institute for Development of Economics and Finance (Indef), Tauhid Ahmad, has reminded that the prospect of the halal product market is also very large overseas, especially in the Middle East which is primarily populated by Muslims. Indonesia can seize this niche to export its halal products.

On the other hand, domestic halal products are generally considered “definitely halal” by domestic market consumers. This makes producers, especially those on a micro and small scale, not sufficiently motivated to register their products to obtain halal certification.

“Although there are still a few micro and small entrepreneurs who have registered, they still have to be encouraged to obtain halal certification for their products. This can be done through lower tariffs, by reaching out to them, and other methods,” said Tauhid.

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Regarding certification for beauty products, the Chairman of the Association of Indonesian Cosmetic Companies and Associations (PPAK) Solihin Sofian stated that Indonesia is now aiming to dominate the halal cosmetic market. The world’s halal cosmetic direction is expected to rely on Indonesia as the largest Muslim-populated country.

Therefore, local wisdom needs to be explored and utilized in accordance with halal principles. At the same time, as a country with the second largest megabiodiversity in the world, Indonesia has a strategic position for diversifying cosmetic raw materials. For example, through the processing of essential oils and seaweed.

Based on the Indonesia Halal Economic Report, the national halal cosmetic industry has a market value of US$4.19 billion in 2022 and is projected to grow by up to 8 percent per year in 2023. Penetration of local cosmetic products continues encouraged in potential countries for halal cosmetic products such as countries in the Middle East and Africa region, and other Muslim countries.

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