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HALAL FOOD EXPORTATION IN INDONESIA AND

THAILAND: A CASE OF QUALITY ASSURANCE DEVELOPMENT

Arranged by:

Nanda Lismatiara Zubaid

041611433085

BACHELOR STUDENT OF ISLAMIC ECONOMIC

FACULTY OF ECONOMICS AND BUSINESS
AIRLANGGA UNIVERSITY
SURABAYA
INDONESIA
2018
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Introduction

The halal industry in recent years has experienced tremendous growth,

one of which is halal food. Halal products are not only identical to the
needs of Muslim communities, but non-Muslim communities in the world
also begin to choose halal products.Based on data from World Islamic Economic
Forum, the global halal food market is projected to be worth USD 1.6 trillion by 2018, accounting
for an estimated 16 percent of the total global food industry. The halal food market has very
good business opportunities, therefore many countries try to increase their competitive
advantage in the halal food sector.

Furthermore, the main challenges in the international market are a competition that comes from
large producers or exporters. The largest producers of halal goods and services are not
necessarily Muslim countries or manufacturers. In fact, the halal market is no longer the domain
of Muslim countries. According to The Halal Food Information Center, production of halal goods
and services are controlled mostly by non-Muslim countries. The largest Halal food exporting
countries are not from Muslim countries, but Brazil and India, which at present rank as the No.1
and 2 leading Halal food exporters of the world with market shares of 10.7% and 9.0%
respectively. Other foods exporting countries are the United States with 4.9% share, China 4.6%,
Thailand 4.4%, Australia 4.4%, France 4.2%, and Russia 3.9%. Indonesia and Malaysia, the
major advocates in promoting Halal food to the world are ranked No. 21 and 23 as Halal food
exporters with about 1% share of the world’s halal market. (Muzakir, 2017)

Ministry of Industry (Republic of Indonesia) states that Indonesia occupies the position of the
largest consumer country of the world's halal food products, amounting to USD 197 billion
USD. The Ministry of Industry of the Republic of Indonesia believes that the halal industrial
area in Indonesia has great potential to be developed because as the Muslim population
reaches 85.2 percent or 200 people out of the total population of 235 million people who
embrace Islam. Based on data from the Global Islamic Economic Report in 2017-2018,
Currently, Indonesia occupies the position of the largest consumer country of the world's
halal food products, which amounts to USD 197 billion USD. This makes Indonesia the
largest market in the world for halal products.

According to Thailand's Halal Food Information Center, there are around 3 million Muslims in
Thailand or around 4.5% of the total population, with the majority living in the country's
southern border cities, namely: Yala, Pattani and Narathiwat. Thailand currently ranks 13th
among the world's largest halal food producers. (National Food Institute Thailand). In 2016,
the value of Thailand’s halal food exports reached USD 5.8 billion with an annual growth
rate of 8%( Halal Food Information Center Thailand). Thailand’s halal certification standards
have developed over the last 68 years. Currently, there are more than 8,000 factories and over
150,000 products receiving halal certification (The Halal Science Center, Chulalongkorn
University). Furthermore, the Thai government has prioritized halal foods by formulating a
five-year plan (2016-2020) to position Thailand to be among the top five exporters of halal
products in the world. Over USD 11.5 million was been allocated to enhance halal businesses
in Thailand. (Thailand Board of Investment)
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Indonesia still needsserious process to develop halal product and ready for competitiveness in
international arena. Furthermore, Indonesia has some competitors and it has become halal
products that are already traded globally. Based off total products of Indonesia in
international trade with several countries in ASEAN. Indonesia stays in number 4 after
Philippines. Singapore stays in number 1 following by Malaysia and Thailand. (Muzakir,
2017)

Thailand is not a country with a majority Muslim population so it is not profitable for Thailand
to develop halal food products to be explored on the domestic market. Surrounded by
countries with large Muslim populations with a government role that is responsive to the
potential market for halal food in the world, Thailand is able to take advantage of halal food
opportunities. Therefore, the government implements a system so that international Muslim
communities believe in the halal products and services produced by Thailand. Whereas
Indonesia Indonesia has great potential for halal food because it is supported by a large
Muslim population. However, Indonesia is only a market and has not become one of the
halal food exporters in the world. In fact, Indonesia is actually very capable of producing
halal products that can be consumed domestically or exported. For this reason, it is
necessary to know the differences in policies in both countries in Indonesia and Thailand as
a step to promote halal food exports in the world.

Literature Review
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In Thailand, there are 4 stages of halal certification development (Pakorn Priyakorn, 2017).
Firstly, Halal 1.0 that is before 1949. Halal status of products and services for Muslim
consumers was judged only by opinion of Islamic scholar without authentication process and
certification paper.

Secondly, Halal 2.0 showed the efforts toward the development of the industry from 1949 to
1997 when the Shiekhul Islam office issued halal certificates to the nursing centers for the
first time. This is to meet the needs of Muslims in Thailand to obtain halal sacrifices amongst
the majority of Thai Buddhists. In 1971, the Thai Islamic Center Committee introduced the
Halal Food Standard which was the first of its kind in the world. This standard is then refined
and enhanced so that it complies with Islamic law and complies with international standards
until all official standards are adopted throughout Thailand (Pakorn Priyakorn, 2017).

While, Halal 3.0 began from 1997 to 2016 where Codex-based Thailand’s Halal Standard
Institute was launched. In 2002, the Thailand Islamic Center Committee succeeded in gaining
Thailand government's confidence with strategic approval towards the establishment of a
halal food hub in southern Thailand. This support was continued with the financial allocation
for the development of the halal-HACCP system in 2003. In 2003 also, the Halal Science
Centre, Chulalongkorn University was founded. Halal status was clarified by halal inspector
supported by scientific laboratory with standardization before being judged by Islamic
scholar. The center of Halal Science is the first to set up and successfully push the halal
industry in Thailand. In 2009, the Committee has successfully issued Halal Management
Rules and sets the level and level of quality assurance for halal products and the use of halal
logo (Pakorn Priyakorn, 2017).

Fourthly, it is Halal 4.0 that begin from 2017 until now that halal logo will be the second
brand for halal products, services, certification will be linked with IOT, cloud, e-commerce
and others (Pakorn Priyakorn, 2017).

Muzakir, Al Alif. 2017. Halal Products of Indonesia in ASEAN Economic Community: Brand
Prospects & Competitiveness. INDONESIAN SCHOLARS JOURNAL. Accesed on 28 November
2018