216-Article Text-352-1-10-20190530

Download as pdf or txt
Download as pdf or txt
You are on page 1of 15

APRIL 2019 | VOL. 16| NO.

1
ISSN: 2232-1047 eISSN: 0127-8886
www.jfatwa.usim.edu.my

HALAL INDUSTRY: ARE THE BUSINESSES FULLY AWAKE?

Norailis Ab. Wahabi


Aimi Fadzirul Kamarubahrinii

i (Corresponding author) Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, email:
norailis@usim.edu.my
ii Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia

Article Progress
Received: 20 January 2019 Revised:28 January 2019 Accepted: 31 January 2019

Abstract

Nowadays, organisations are involved in intense competition to sell their products and services
globally. The current target market covers nearly every country in the world, including Islamic
countries. For example, Japan and Australia are putting great effort into catering to a rising
number of Muslim clients by increasing their investment and expertise in halal products and
services. Their aim is to attract the attention of the growing Muslim population to add a billion
by 2050. Halal products include food and beverages, personal care, cosmetics, pharmaceuticals
and health products. Meanwhile, halal services comprise areas such as Islamic finance, takaful,
travel, education and healthcare. Subsectors such as media, consulting, events, online services,
software development, logical services and lab testing can also benefit from the growth of the
halal sector as a whole. The authors will attempt to achieve two objectives in this paper: (i) to
examine current literature and (ii) to determine the success factors of and issues faced by halal
businesses. The Malaysian government’s intention is not only to support the halal industry in
terms of complying with regulations set by the authorities and obtaining the relevant
certification; the output must also meet international standards to supply consistently high-
quality products and services to win customers’ hearts.

Keywords: Halal business, success factors, operations, halal governance

PENDAHULUAN
Muslim consumers are obligated by their religion to only consume products that are
halal. According to Islamic teachings, Muslims are obliged to check a product prior
to consumption by ensuring that it is halal and to stay away from consumables that
are suspected to be non-halal. Therefore, when purchasing products, they look for
the halal logo which is certified by the religious authority in Malaysia (Ahasanul
Haque et al., 2015). The advantage of being the largest population in Malaysia is that
Muslims have few problems purchasing halal products and services since they are
readily available and easy to obtain. Nevertheless, there is also a need for the
21
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

authority to monitor and enforce standards to ensure the genuineness of halal


products and services, particularly when they are made, sold, prepared or provided
by non-Muslims (Zakaria, 2008).

ISSUES IN HALAL INDUSTRY

The Conception
The concept of halal can no longer be restricted to simply meaning food that is “pork
free” (Abdul Majid et al., 2015). Zakaria (2008) noted that the term “non-halal” covers
a multitude of forms such as emulsifiers and other food contents (e.g. gelatine,
enzymes, lecithin and glycerine) as well as additives such as stabilisers, flavouring,
colouring and breadcrumbs. These contribute to halal food products that have been
enhanced with doubtful substances or animal enzymes and may be questionable for
consumption under Islamic law. Besides that, due to the difficulty of finding the
sources of the goods purchased, Muslim consumers often rely on the ingredients
stated on the outer packaging when buying halal items. There are many products
available in the market, but the issue is becoming complicated as many ingredients
are listed using their scientific terminologies.
It has been observed that the importance of halal products is growing rapidly
and initial protests against serving halal products in the west are slowly declining.
Though the concept of halal products has been gaining popularity, the majority of
non-Muslims are not aware of the actual benefits of halal food products. The
emergent theme is that knowledge of halal products should be enhanced in such a
way that it better educates consumers about their benefits. Many respondents said
they were not aware of the actual difference between halal and non-halal food
quality and did not know the halal services available in the market (Muhammad
Ayyub, 2015). Every Muslim must ensure that his or her food comes from a halal
source in terms of ingredients and that the overall process of making the food is in
accordance with Shariah principles (Zakaria, 2008).
The halal concept does not only apply to the slaughtering of animals or
prohibition of alcohol food items, but also to sustainability. This should be promoted
by encouraging non-Muslims to socially interact with Muslims as well as supporting
other factors that might improve non-Muslims’ understanding and familiarity with
halal principles (Rezai et al., 2012). However, there are non-Muslims who perceive
that the halal concept is not fully concerned with animal welfare as they feel that the
halal procedure of animal slaughter is inhumane. Many allegations have been made
stating that Islamic slaughtering procedures do not treat animals in a humane way.
However, other arguments indicate that the Islamic way of slaughtering is one of the
best ways of ensuring the animal does not suffer. The authorities need to be sensitive
and aware of the rising trends in the halal demand.

22
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

Branding and Packaging


Previous research has indicated that marketers and managers need to take into
account branding and packaging when introducing new products, especially for
Muslim markets. It must first be stated that the Islamic dietary and consumption
system is different and unique compared to other ethnic dietary systems (Zakaria,
2008). The key trends in fostering the growth of developed packaged food markets
are convenience, functionality and indulgence. The real value of packaging is that the
package is an integral part of products today (Ahmed et al., 2005). Ingredient
branding also plays a central role in the Muslim psyche as a means by which
authenticity and heritage are evaluated. This is most evident in single-issue politics
groups calling for a boycott of certain brands and the emergence of subsequent
copycat boycott brands (Wilson and Liu, 2011). This has serious implications for
international companies operating in food, cosmetics and pharmaceutical products
(Mukhtar and Butt, 2012). However, the prevalent issue in Malaysia today is the
misuse of the halal label - specifically the act of labelling non-halal products as halal -
which has irked many Muslims in the country. This difficulty in determining a
product’s halal status has made Malaysian Muslims dependent on the country’s
authority body. Muslims consider food and products that bear the halal label or logo
as being fit for consumption according to Islam and prepared in compliance with
Islamic rules and guidelines (Zakaria, 2008).
A study conducted by Awan et al. (2015) showed that marketers should first
acknowledge the fact that halal food marketing campaigns must be designed in a
manner that influences the personal and societal perception and religious beliefs of
the consumers. On the other hand, producers must be alert to the fact that customers
are knowledgeable and assume that they check the products’ quality features and
health value before consumption. Therefore, the overall marketing efforts should not
solely focus on product packaging such as halal logos and certifications, but also on
the quality of the product itself.

The Halal Governance


In a multi-racial and culturally diverse society, understanding the needs of each
culture is important so as to promote a harmonious and tolerant society. Different
countries will use different acts, regulations or guidelines, but it is still necessary to
consistently follow international practices with allowance for some modifications to
best suit local circumstances. Otherwise, their food products will not entirely fulfil
the market requirements, which would then make it difficult to enter the global
market (Abdul Talib and Mohd. Ali, 2009; Noordin et al., 2009).
The halal certificate and logo not only provides Muslims with a guarantee that
what they consume or use is compliant with Islamic laws; it also encourages
manufacturers to meet the halal standards. The issue of food safety is becoming more
complex in line with the advancements of food technology. Trading food without
certification and providing false documentation are among the contributing factors

23
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

(Syed Marzuki et al., 2012). Initially, the idea of using the halal logo was aimed at
helping Muslim consumers be sure of their product selection. The only halal logo
that is permitted by the Department of Islamic Development Malaysia (JAKIM) is the
one that features the word “Malaysia” (Abdul Majid et al., 2015). The main
challenges in its governance were lack of enforcement by JAKIM, lack of assistance
given to the halal certification body by the related authority, lack of collaboration
among the halal certification authorities and the slow process of issuing the halal
certification and logo (Shahidan et al., 2005).
Abdul Talib and Abdul Hamid (2014) suggested that the government,
religious authorities, municipal councils, industry players and individuals need to
work together when it comes to halal certification. The government’s efforts in
developing the halal logistics industry and ultimately the halal market do not focus
on industry practitioners. Higher education in Malaysia has also been given the
support to be part of and eventually contribute toward the betterment of the halal
industry. Halal research institutions from local universities such as the Halal Product
Research Institute (Universiti Putra Malaysia), International Institute for Halal
Research and Training (International Islamic University Malaysia), Institute of Halal
Research and Management (Universiti Sains Islam Malaysia), Malaysia Institute of
Transport and Faculty of Business Management (Universiti Teknologi MARA) and
Universiti Tun Abdul Razak are some of the established halal logistics research
centres in Malaysia. It was noted by the respondents that many scholars, researchers,
university faculty members and university students conducted visits and organised
seminars and dialogue sessions with industry experts from the halal and logistics
fields. Besides that, various international conferences and conventions have also been
held in Malaysia such as the World Halal Forum.
Ireland and Rajabzadeh (2011) found that many Muslim consumers in the
United Arab Emirates had expressed great concern that some product categories
might not be halal; these fears represented a failure of the system. The test indicates
that the consumers have serious concerns about meat-related products in terms of
how the animals are slaughtered and the possible use of pig parts in the production
process. This supports research by Abdul Majid et al. (2015), who found that the
arising halal issues encompassed improper hygienic practice at processing premises
and expiration of halal certification. These issues have begun to penetrate the market
and are particularly influential in most Islamic countries. The inconsistent manner of
slaughtering poultry and meat produces with the rites of Islam and the practice of
intermixing products with non-halal materials are issues that often crop up in halal
industries. According to Zakaria (2008), it is difficult to verify the halalness of food
and other groceries, especially when they are pre-packaged or processed. Apart from
higher costs, finding halal sources can be a hassle. Some suppliers also run out of
halal meat from time to time and restaurants are then forced to purchase meat that is
non-halal in order to keep the business running (Wan Hassan et al., 2009).

24
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

However, it quite difficult to handle businesses that are not familiar with Islamic
culture. In Australia, for example, some restaurant managers explained that they did
not put up the halal sign because they were afraid of being associated with Muslims
or reports in the media linking Muslims to acts of terrorism. Given the current
political climate, some of the managers stated that non-Muslim customers would be
reluctant to enter restaurants displaying the halal sign (Wan Hassan et al., 2009).
Full commitment and involvement of the management and workforce are
required in order to apply the system to implement a successful halal market
environment. Previous research by Syed Marzuki et. al (2012) revealed that
restaurant managers showed much interest and concern in the halal status of their
premises. Halal certification is very important to the restaurant industry in Malaysia
but the actual implementation of its standards is crucial for the comprehension of
those who are unfamiliar with Islamic dietary rules. Halal certification can only be
obtained when the food has been verified as nutritious and prepared from
permissible ingredients in a clean and hygienic manner (Badruldin et al., 2012). In
order to implement a successful halal market environment, the consideration for
Muslim countries by focusing on segregation of halal from non-halal is extremely
important (Tieman et al., 2013).

Operational inefficiency
According to Noordin et al. (2009), two issues arise in the halal certification system
which are operational inefficiency and halal governance. Table 1 shows that the
operational inefficiency of the halal certification process is due to two factors:
applicants and internal factors.

Table 1: Operational inefficiency


Applicants Internal Factors
Lack of understanding of halal Lack of expertise as new staff with little
procedures experience of the system contribute to the
slow processing. Without tight coordination,
this minimises the number of halal certificate
approvals.
Delay in submitting supporting Unsystematic filing system also contributes
documents to inefficient operations
Delay in making payment of Premise inspection may require more than a
certification fee day to be completed, especially for multi-
national industries and hotels
Unaware of the acknowledgement Delay in receiving lab test results
that has been sent to them via e-
mail
Source: Noordin et al. (2009)

25
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

These findings support the issues highlighted by Shahidan et al. (2005). It is


suggested that with better understanding, cooperation and training for both parties,
the halal certification process can be improved in order to achieve efficiency.

Influencing Factors of Halal Industry’s Success


The Muslim population consists of about 1.6 billion people who are spread across the
world. Halal products and services are also gaining increasing acceptability among
non-Muslims. Halal market demand refers to the needs and wants resulting from
customer and community pressures in the halal industry (Tieman, 2007; Kamaruddin
and Jusoff, 2009). Consumer pressure for halal products increases when consumers
become more informed (Tieman, 2007; Kamaruddin and Jusoff, 2009). The halal
industry has seen considerable growth and development over the years fuelled by
escalating awareness of halal products among consumers and product manufacturers
(Global Leader, 2008).
Malaysia plans to become a global hub for Islamic halal food by 2010 by using
its edge over other Muslim nations in trading, logistics, banking and halal
certification. The Malaysian government in its 2006-2010 national economic
development plans outlined the creation of a nodal agency to promote the country as
a centre for halal foods that meet Islamic dietary requirements and Islam-approved
way of slaughtering animals. Moreover, Malaysia’s certification standard for halal
food products is widely recognised.

Government Support
The halal industry is well developed in the manufacturing and agro-based sectors
and has gained the support of the Malaysian government in its development.
Government support refers to policies, regulations and agencies introduced by the
government as well as incentives such as grants, finance, training and consultation
(Tieman, 2007). The halal industry sector is one of the major contributors to future
economic growth. It is considered an important intermediary role in the trade of
halal products or services in all sectors of the economy and has generated a large
number of job opportunities. Apart from the products and services offered, the halal
industry is greatly dependent on the quality and skills of the people involved in
ensuring its success. The role of the government is apparent in the logistics industry
as political interventions such as developing key logistics infrastructure will
accelerate the industry’s growth and development (Goh and Pinaikul, 1998).
Besides that, the government’s support comes in the form of promotion,
education and supplying employees (Peng and Vellenga, 1993; Gunasekaran and
Ngai, 2003). Political and governmental factors can be seen from various efforts such
as tax incentives, financial support, certification and guidelines (Ramli, 2006;
Muhammad et al., 2009; Tan et al., 2012; Abdul Talib and Abdul Hamid, 2014). In a
predominantly Muslim country such as Malaysia, the full support of the government
has led to the creation of the Halal Development Corporation (HDC). As one of the

26
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

agencies set up under the Ministry of International Trade and Industry (MITI),
HDC’s role is to develop awareness on understanding the halal concept (HDC, 2010).

Market demand
Halal market demand refers to the needs and wants resulting from customer and
community pressures in the halal industry (Tieman, 2007; Kamaruddin and Jusoff,
2009). Consumer pressure for halal products increases when consumers become
more informed (Tieman, 2007; Kamaruddin and Jusoff, 2009). Presently, consumer
demand in food production has also changed considerably. Along with the national
aim to make Malaysia a global halal hub (Habibah, 2011), the industry is gaining in
popularity day by day and opening up opportunities to Muslim producers to expand
the target market domestically and internationally. Muslims today are more aware of
their food consumption (Bonne et al., 2007; Bonne & Verbeke, 2008) and the need for
halal-certified products and services does not only matter during the point of
purchase or consumption; the whole supply chain, from upstream to downstream, is
important (Tieman, 2011). Manufacturers and marketers use halal certification,
signified by a halal logo, as a way to inform and reassure their target consumers that
their products are halal and Shariah-compliant (Shafie and Othman, 2006).

Assurance System
As firms enhance their commitment to a supply chain orientation, there will be an
increased need to share halal assurance leading to halal system integration. Higher
levels of supply chain complexity and uncertainty lead to greater investments in
halal assurance system integration (Premkumar et al., 2005).The implementation of a
halal assurance system is essential in order to ensure the effective and efficient
production of halal products. Muhammad et al. (2009) described the halal assurance
system as being based on the three zeros concept: zero limit (no haram material used
in the production), zero defect (no haram product is produced) and zero risk (no
disadvantageous risk should be taken by the producer or company). Consequently,
the structure for halal assurance systems plays a vital role in integrating the
processes that assist the establishment of value within firms and across the supply
chain. According to Muhammad et al. (2009), understanding the supply chain and
production process is a fundamental step for Muslim producers. The valal value
chain consists of feed and farm management, ingredients, manufacturing or
processing, logistics, research and development or technology, finance and
communication or branding (Noordin et al., 2009).
Halal assurance systems should be organised within the arrangement of the
supply chain in order to “fit” its overall strategy (Brewer et al., 2000). Higher levels of
supply chain difficulty and uncertainty contribute to greater investments in halal
assurance system integration (Premkumar et al., 2005), thus helping the entire chain
to produce safe and nutritious food products as justified by Islamic law. Hence, for a
company producing halal products, the structure of halal assurance systems plays a

27
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

critical role in integrating the processes that facilitate the creation of value within
firms and across the supply chain (Bowersox et al., 2006; Porter, 1991). Halal
assurance system integration between firms is what enables the entire supply chain
to become responsive to end-customer needs, potentially producing products with
halal certification as a means to satisfy those needs. Thus, effective halal assurance
system investments can create a competitive advantage for a firm within and across
the supply chain as a capability for creating value (Bowersox et al., 2006; Bowersox et
al., 1999; Foster, 2006).
The Shariah-compliant firms have the obligation to ensure that their trained
staff are aware of and understand the requirements for halal processing of their
products and services (HDC, 2010).

Technology
According to Mazlan (2005) and Tieman (2010), the use of information technology
(IT) is gaining interest in halal logistics, and logistics service providers (LSP) should
take this as an opportunity. Besides that, the use of IT in halal logistics is a profitable
business (Zailani et al., 2010) and enhances the integrity of halal products and
services along the supply chain (Bahrudin et al., 2011; Tan et al., 2012a) as it allows
for tracking and tracing services. The constant changes in technology are inevitable
and firms must be alert to its influence on their business operation (Mohamed et al.,
2010). The use of IT in logistics helps to improve productivity of LSPs, enhance their
efficiency level and even help to position a country to become a logistics hub (Piplani
et al., 2004; Hazen and Byrd, 2012). This is an indication that use of IT is also vital in
halal logistics, so halal LSPs should grab this opportunity as it is gaining interest and
is a lucrative business (Mazlan, 2005; Tieman, 2010; Zailani et al., 2010). According to
Bahrudin et al. (2011) and Tan et al. (2012), the tracking and tracing activities in halal
logistics is part of IT and enhances the integrity of the service provided. Therefore,
the applications of IT in Halal logistics benefit both the service providers and
consumers. For LSPs, the advantages are greater transparency and better control
(Tieman, 2010), while consumers gain more assurance. Firms must be alert to
changes in technology too, as it will alter the way they operate their businesses
(Mohamed et al., 2010).

Socio-culture
As mentioned by Mohamed et al. (2010), social factors have great influence on the
demand of a firm’s products and services. Since Muslim consumers are more
knowledgeable about their food consumption (Bonne et al., 2007; Bonne and
Verbeke, 2008), trust and confidence are crucial aspects of purchasing halal products
and services (Abdul et al., 2009). Besides that, the acceptance of halal products and
services among Muslims and non-Muslims is due to the perception that halal is a
symbol of a healthier lifestyle and cleaner preparation (Ambali and Bakar, 2013; Aziz
and Chok, 2013). Moreover, Mohamed et al. (2010) and David (2011) found that

28
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

demographic variables such as age, gender, education level, level of religiosity and
geographical area play a significant role in deciding social factors. This is because
these factors affect the understanding and acceptance of the halal concept (Rezai et
al., 2009).
Malaysian consumers are particularly concerned with the halal status of a
product or service and whether the halal logo is genuine or not (Shafie & Othman,
2006; Abdul et al., 2009). Furthermore, aside from conforming to Islamic teachings,
consumers choose halal products and services due to health reasons (Ambali &
Bakar, 2013). Halal products are known to be prepared in a hygienic environment
(Aziz and Chok, 2013), making them healthy and safe for consumption or usage
(Bonne & Verbeke, 2008). As mentioned earlier in this chapter, the Muslim
population’s growth and dominance in the halal market contributes to their
increasing acceptance of the concept (MITI, 2006; Adams, 2011).

Branding
Branding is an act in which an organisation uses a name, phrase, design, symbol or
combination of these to identify its products and distinguish them from those of
competitors, while brand name is any word, “device” (design, sound, shape, or
colour) or combination of these used to distinguish a seller’s goods or services
(Berkowitz, 1997). According to Kotler & Armstrong (2006), a brand is a name, term,
sign, symbol, design or a combination of these, that identifies the maker or seller of a
product or service. Branding can add value to a product, as consumers view it as an
important part of a product.
There are a few reasons why brands are important. Firstly, brands have never
been more crucial than they are today. Given the proliferation of products and
services in the global marketplace brought about by the ongoing liberalisation in the
international trading environment, developments in ICT and rapid changes due to
globalisation, consumers today have a wide choice of products and services to
choose from. It is thus important that we develop and promote Malaysian brand
names to differentiate the country’s products and services in the marketplace
(MATRADE, 2004).
Secondly, in the world of parity where everything tends to be equal and the
world marketplace is a world of commodities, brands differentiate products. The
availability of new technologies has enabled companies to easily replicate the
products, systems, services and processes of others, generating major strategic
problems for businesses in differentiation. Added to this problem is the rapidly
decreasing life cycle of products, in some cases now down to a matter of weeks
(MATRADE, 2004). On the other hand, halal branding is what defines halal as a
cross-over brand that has demonstrated the ability to attract Muslims and non-
Muslims alike (Evans, 2004).

29
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

FUTURE OF HALAL INDUSTRY


Muslims today are increasingly concerned over whether the products they use are
halal (permissible) or haram (not permitted). As a country with a largely Muslim
population, Malaysia has established various agencies and authority bodies to
preserve the halal status of related products and services. It has also become a
hotspot for conventions, seminars and conferences to discuss halal issues on a global
platform (Abdul Talib and Abdul Hamid, 2014). Halal certification is one of the
methods adopted by many Islamic countries, including Malaysia, to assure
consumers of the authenticity of a product’s halal status (Halim and Ahmad, 2014).
Thus, the halal industry has become a key player in Malaysia’s economic growth.
The government has encouraged the industry’s growth due to the availability of raw
materials, infrastructure support and processing technologies to produce and market
halal products readily with the vision of becoming an international halal hub
(Othman and Wan Hussin, 2009). Besides food-based products, Malaysia is also a
leading figure in Islamic banking and finance, a halal-based service with regulations
and a framework that obey Islamic law with financial instruments like sukuk to
counter interest-based investment. The most well-known institution in Malaysia that
promotes halal deposits and transactions is Tabung Haji, which provide a saving
service for Muslims to embark on the Hajj (Muhamed et al., 2014).
In the era of globalisation, the halal industry has sparked a halal surge, where
halal products need to be globalised due to the rapid growth of the Muslim
population throughout the world (Adams, 2011). A study by Hasan and Hamdan
(2013) showed that non-Muslims also use halal certification as a quality benchmark.
On the other hand, there is the existence of institutional pressure in the halal food
industry (Othman et al., 2009).
Now the main question is how businesses react to the halal industry.
According to Hunter (2014), many young people see business as a career being
contradictory to their religious devotion. and few see entrepreneurship as a way to
deepen their faith. This clearly shows that many believe that they cannot bring
religion into their daily lives. To them, halal is just a term to show them what is
permitted to be consumed but for others who realise its deeper significance, it is an
opportunity to expand their businesses even further in the global market.
The halal supply chain is also affected by the change in market demand
(Tieman & Che Ghazali, 2013). If businesses do not accept halal integration in their
products, the number of suppliers will decrease while the demand from the
consumers will increase, thus causing a shortage in supply (Alam & Sayuti, 2011).
Hence, it is an indicator that most businesses and producer are focusing on quantity
rather than quality. Even though Malaysia is leading in the halal industry, there are
still ideas and improvements that can be taken from other countries such as
Indonesia, which practises a concept known as spiritual economics with religious
piety and spiritual virtue integrated in business (Rudnyckyj, 2009).

30
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

CONCLUSION
To conclude, the Malaysian halal industry is on the right track to promote and
globalise the halal industry in other countries by setting an example of halal food
production, manufacturing and distribution in all sectors. Furthermore, government
agencies such as the Department of Islamic Development Malaysia (JAKIM), Halal
Development Centre (HDC), Malaysia Productivity Corporation (MPC) and non-
government agencies such as Dewan Perniagaan Islam Malaysia (DPIM) play a key
role in facilitating the growth of Malaysian halal products and sevices companies in
the international market and enriching the development of its standards worldwide.
Therefore, we should refer to the fundamentals of Shariah rules, which emphasise
that eating halal food is linked to spiritual development and results in a good mind
and soul.

REFERENCES
Abdul Talib, M.S. and Abdul Hamid, A.B. (2014). Halal logistics in Malaysia: A
SWOT analysis. Journal of Islamic Marketing, vol.5 no.3 pp.322 – 343.
Abdul Talib, H. and Mohd. Ali, K.A. (2009). An Overview of Malaysian Food
Industry: The Opportunity and Quality Aspects. Pakistan Journal of Nutrition,
vol.8 pp.507-517.
Evans, A. (2004). Brand New Paradigm. The Halal Journal. Special Issue 2004. p.11.
Abdul Majid, M.A., Zainal Abidin, I.H., Mohd Abd Majid, H.A. and Tamby Chik, C.
(2015). Issues of Halal Food Implementation in Malaysia. Journal of Application
Environment Biological Sciences, vol.5 no.6S pp.50-56.
Abdul, M., Ismail, H., Hashim, H., and Johari, J. (2009). SMEs and halal certification.
China-USA Business Review, vol.8 no.4 pp.22-29.
Adams, I.A. (2011). Globalization: Explaining the dynamics and challenges of the
halal food surge. Intellectual Discourse, vol.19 no.1 pp.123-145.
Ahasanul Haque, Abdullah Sarwar, Farzana Yasmin, Arun Kumar Tarofder and
Mirza Ahsanul Hossain, (2015). Non-Muslim consumers’ perception toward
purchasing halal food products in Malaysia. Journal of Islamic Marketing, vol.6
Iss.1 pp.133-147.
Ahmed, A., Ahmed, N. and Salman, A. (2005). Critical issues in packaged food
business. British Food Journal, vol.107 Iss:10 pp.760–780.
Alam, S.S. and Sayuti, N.M. (2011). Applying the Theory of Planned Behavior (TPB)
in Halal Food Purchasing. International. Journal of Commerce and Management,
vol.21 no.1 pp.8-20.
Ambali, A.R. and Bakar, A. N. (2013). Ḥalāl food and products in Malaysia: People’s
and policy implications. Intellectual Discourse, vol.21 no.1 pp.7-32.
Awan, H.M., Siddiquei, A.N. and Haider, Z. (2015). Factors affecting Halal purchase
intention – evidence from Pakistan’s Halal food sector. Management Research
Review, vol.38 Iss. 6 pp.640–660.

31
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

Aziz, Y. A. and Chok, N. V. (2013). The role of halal awareness, halal certification,
and marketing components in determining halal purchase intention among
non-muslims in Malaysia: A Structural Equation Modeling Approach. Journal of
International Food & Agribusiness Marketing, vol.25 no.1 pp.1-23.
Badruldin, B. Mohamed, Z., Sharifuddin, J., Rezai, G., Abdullah, A.M., Abd Latif, I.
and Mohayidin, M.G.(2012). Clients; perception towards JAKIM service quality
in Halal certification. Journal of Islamic Marketing, vol.3 no.1 pp.59–71.
Bahrudin, S.S.M., Illyas, M.I., & Desa, M. I. (2011). Tracking and tracing technology
for halal product integrity over the supply chain. In 2011 International
Conference on Electrical Engineering and Informatics (ICEEI). pp.1-7
Bonne, K. and Verbeke, W. (2008). Muslim consumer trust in halal meat status and
control in Belgium. Meat science, vol.79 no.1 pp.113-123.
Bonne, K., Vermeir, I., Bergeaud-Blackler, F. and Verbeke, W. (2007). Determinants of
Halal meat consumption in France. British Food Journal, vol.109 no.5 pp.367-386.
Bowersox. Donald J., Closs, David J. and Cooper, M. Bixby. (2006). Supply Chain
Logistics Management (2nd ed.). Boston: McGraw-Hill Irwin.
Brewer, P.C. and T.W. Speh (2000). Using the Balanced Scorecard to Measure Supply
Chain Performance. Journal of Business Logistic, vol.21 no.1 pp.75-93.
David, F. R. (2011). Strategic Management: Concepts and Cases. Singapore: Pearson.
Foster, T. A. (2006). World's best-run supply chains stay on top regardless of the
competition. Global Logistics & Supply Chain Strategies, vol. February pp. 2760.
Global Leader. (2008). World population prospects the Islamic bombs. Retrieved
November 17th, 2009, from
http://www.freeworldacademy.com/globalleader/population.htm
Goh, M., and Pinaikul, P. (1998). Logistics management practices and development in
Thailand. Logistics Information Management, vol.11 no.6 pp.359-369.
Gunasekaran, A. and Ngai, E.W.T. (2003). The successful management of a small
logistics company. International Journal of Physical Distribution & Logistics
Management, vol.33 no.9 pp.825-842.
Habibah, C.H. (2011). The confidence level of purchasing product with halal logo among
consumers. Dissertation for Masters. Universiti Utara Malaysia.
Halim, M.A.A. and Ahmad, A.A. (2014). Enforcement of consumer protection laws
on halal products: Malaysian experience. Asian Social Sciences, vol.10 no.3 pp.9-
14.
Hassan, S.H. and Hamdan, H. (2013). Experience of non-Muslim consumers on halal
as third party certification mark in Malaysia. Asian Social Sciences, vol.9 no.15
pp.263-271.
Hazen, B.T. and Byrd, T.A. (2012). Toward creating competitive advantage with
logistics information technology. International Journal of Physical Distribution &
Logistics Management, vol.42 no.1 pp.8-35.
HDC (2010). Halal Guide Book: Guide for Food Procedures. PJ, Selangor, Halal Industry
Development Corporation.

32
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

Hunter, M. (2014). Entrepreneurship as a means to create Islamic economy. Economics


Management and Financial Markets, vol.9 no.1 pp.75-100.
Ireland, J. and Rajabzadeh, S.A. (2011). UAE consumer concerns about halal
products. Journal of Islamic Marketing, vol. 2 Iss.3 pp.274 – 283.
Kamaruddin, R. and Jusoff, K. (2009). An ARDL Approach in Food and Beverages
Industry Growth Process in Malaysia. International Business Research, vol.2 no.3
pp.98-107.
Kotler. P and Armstrong. G. (2006). Principles of Marketing. 11th Edition. New Jersey.
Pearson Education. P. 229.
Malaysia External Trade Development Corporation (MATRADE). 2004. Branding For
Export: Q&A. pg.1.
Mazlan, M. (2005). Innovation diffusion and ICT adoption in JAKIM Halal certified
company in Klang Valley. Doctoral dissertation, Universiti Teknologi MARA
(UiTM).
Ministry of International Trade and Industry (MITI). (2006). Malaysia Third Industrial
Master Plan (IMP3) 2006-2020. Kuala Lumpur: Pencetakan Nasional Malaysia
Berhad.
Mohamed, Z.A., Ann, H.J., and Yee W.F. (2010). Strategic Management. Selangor:
Oxford Fajar
Muhamed, N.A., Ramli, N.M., Aziz, S.A. and Yaakub, N.A. (2014). Integrating
Islamic Financing and Halal Industry: A survey on current practices of the
selected Malaysian Authority Bodies. Asian Social Sciences, vol.10 no.17 pp.120-
126.
Muhammad Ayyub, R. (2015). Exploring perceptions of non-Muslims towards Halal
foods in UK. British Food Journal, vol.117 Iss.9 pp.2328 – 2343.
Muhammad, N.M.N., F.M. Isa and B.C. Kifli (2009). Positioning Malaysia as Halal-
Hub:Integration Role of Supply Chain Strategy and Halal Assurance System.
Asian Social Science, vol.5 no.7 pp.44-52.
Noordin, N., N.L.M. Noor, M. Hashim and Z. Samicho (2009). Value Chain of Halal
Certification System: A Case of the Malaysia Halal Industry. In the Proceedings of
the 2009 European and Mediterranean Conference on Information System, pp:
1-14.
Othman, P., Sungkar, I. and Sabri Wan Hussin, W. (2009). Malaysia as an
International Halal Food Hub: Competitiveness and Potential of Meat-based
Industries. Asean Economic Bulletin, vol.26 no.3 pp.306-320.
Othman, R., Ahmad, Z.A. and Zailani, S. (2009). The effect of institutional pressures
in the Malaysian halal food industry. International Business Management, vol.3
no.4 pp.80-84.
Peng and Velleng Peng, L. and Vellenga, D. (1993). The government’s role in
promoting logistics services in China. Logistics and Transportation Review, vol.29
no.4 pp.301-318.

33
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

Piplani, R., Pokharel, S., and Tan, A. (2004). Perspectives on the use of information
technology at third party logistics service providers in Singapore. Asia Pacific
Journal of Marketing and Logistics, vol.16 no.1 pp.27-41.
Porter. Michael E. (1991). Towards a Dynamic View of Strategy. Strategic Management
Journal, vol.12 no.Winter pp.95-117.
Premkumar. G., K. Raniamurthy and C.S. Saunders (2005). Information Processing
View of Organizations: An Exploratory Examination of Fit in the Context
lnterorganizational Relationships. Journal of Management Information Systems,
vol.22 no.1 pp.257-294.
Ramli, N. (2006). Halal-the new global market force. Retrieved from
http://www.skrine.co m/halal-the-newglobal-market-force-part-1
Rezai, G., Mohamed, Z. and Shamsudin, M.N. (2012). Non-muslim
consumers'understanding of Halal principles in Malaysia. Journal of Islamic
Marketing, vol.3 no.1 pp.35 – 46.
Rezai, G., Mohamed, Z. A., Shamsudin, M. N., and Eddie, C. F. E. (2009). Concerns
for halalness of halal-labelled food products among Muslim consumers in
Malaysia: Evaluation of selected demographic factors. Economic and Technology
Management Review, vol.4 pp.65-73.
Rudnyckyj, D. (2009). Spiritual economies: Islam and Neoliberalism in contemporary
Indonesia. Cultural Antropology, vol.24 no.1 pp.104-141.
Shafie, S. and Othman, M.N. (2006). Halal certification: an international marketing issues
and challenges. Proceeding at the International IFSAM VIIIth World Congress,
Penang, pp. 28-30.
Shahidan, S. and Md. Nor Othman (2006). Halal Certification: An International
Marketing Issues and Challenges. [Accessed on 31 Jan 2016]. Kuala Lumpur
Syed Marzuki, S.Z., Hall, C.M. and Ballantine, P.W. (2012). Restaurant managers'
perspectives on halal certification. Journal of Islamic Marketing, vol.3 no.1 pp.47–
58.
Tan, M. I. I., Razali, R. N. & Husny, Z. J. (2012). The Adoption of Halal Transportations
Technologies for Halal Logistics Service Providers in Malaysia. In Proceedings of
World Academy of Science, Engineering and Technology. World Academy of
Science, Engineering and Technology.
Tan, M. I. I., Razali, R. N., and Desa, M. I. (2012). Factors influencing ICT adoption in
halal transportations: A case study of Malaysian halal logistics service
providers. International Journal of Computer Science Issues, vol.1 no.2 pp.62-71.
Tieman, M. and Che Ghazali, M. (2013). Principles in halal purchasing. Journal of
Islamic Marketing, vol.4 no.3 pp.281-293.
Tieman, M. (2007). Modern cluster applications for age-old halal. The Halal Journal,
pp. 45-48.
Tieman, M. (2010). Halal Logistics. from http://www.logasiamag.com/article/
halallogistics/1744 [Accessed on 21 Jan 2016]

34
http://jfatwa.usim.edu.my
Journal of Fatwa Management and Research | Jurnal Pengurusan dan Penyelidikan Fatwa | ‫مجلة إدارة وبحوث الفتاوى‬
April 2019 |Vol. 16| ISSN: 2232-1047 | eISSN: 0127-8886

Tieman, M. (2011). The application of Halal in supply chain management: in-depth


interviews. Journal of Islamic Marketing, vol.2 no.2 pp.186-195.
Wan Hassan, W.M. and Awang, K.W. (2009). Halal food in New Zealand restaurants:
An Exploratory Study. International Journal of Economics and Management, vol.3
no.2 pp. 385–402.
Wilson, J.A.J. and Liu, J. (2011). The challenges of Islamic branding: navigating
emotions and halal. Journal of Islamic Marketing, vol.2 Iss.1 pp.28–42.
Zailani, S., Arrifin, Z., Abd Wahid, N., Othman, R. and Fernando, Y. (2010). Halal
Traceability and Halal Tracking Systems in Strengthening Halal Food Supply
Chains for Food Industry in Malaysia (A Review). Journal of Food Technology,
vol.8 no.3 pp.74-81.
Zakaria, Z. (2008). Tapping Into the World Halal Market: Some Discussions on
Malaysian Laws and Standards. Shariah Journal, vol.16 pp.603-616.

Disclaimer
Opinions expressed in this article are the opinions of the author(s). Journal of Fatwa
Management and Research shall not be responsible or answerable for any loss, damage or
liability etc. caused in relation to/arising out of the use of the content.

35
http://jfatwa.usim.edu.my

You might also like