Factors Driving Demand Growth

A Vast Muslim Consumer Base

Indonesia and Malaysia both have large Muslim populations, which form the core consumer base for halal-certified products. In Indonesia, nearly 230 million Muslims—about 87% of the population—strictly follow Islamic dietary and consumption rules. They choose only halal-certified products, avoiding non-halal ingredients like pork and alcohol. This cultural habit drives strong demand in both large supermarkets and local markets.

In Malaysia, where Islam is the official religion and 63% of the population is Muslim, there is similarly high demand. Malaysian Muslims are attentive not only to food but also to the halal status of cosmetics, pharmaceuticals, and everyday goods. This robust consumer demand in both countries creates a vast market for halal-certified products and directly drives the need for certification inspections.

Government Support and Market Regulation

The governments of both Indonesia and Malaysia have introduced policies to support the halal industry, contributing to the growing demand for certification.

Indonesia implemented mandatory halal certification starting in 2024. Under this policy, nearly all food, beverage, cosmetic, and pharmaceutical products must be certified halal, with few exceptions. The Badan Penyelenggara Jaminan Produk Halal (BPJPH) oversees standards, inspections, and certifications. The government also provides tax incentives and financial support to SMEs producing halal products, encouraging more businesses to enter the market.

Malaysia has a well-established halal certification and monitoring system led by JAKIM. It enforces strict inspections from raw material sourcing to packaging and storage. The government also promotes halal R&D by supporting enterprises and research institutions, aiming to enhance Malaysia’s competitiveness in the international market. These initiatives regulate the market and encourage businesses to pursue halal certification.

How to Conduct Halal Certification

Halal certification inspections are rigorous, ensuring compliance with religious and quality standards. The process typically involves the following stages:

Application Stage

• Submitting Materials: Enterprises must submit documents such as business licenses, production permits, product formulas, and process flowcharts. These help assess the potential for halal compliance. For instance, a food company must specify whether each ingredient is of animal, plant, or synthetic origin and whether it adheres to Islamic laws.
• Choosing a Certification Body: In Indonesia, BPJPH is the primary authority. In Malaysia, it’s JAKIM. Private recognized agencies also exist in both countries. Businesses should consider the body’s credibility, market recognition, and cost-efficiency.

Review Stage

• Document Review: The certification body examines submitted documents to ensure accuracy and compliance. Suspicious ingredients or processes must be clarified.
• On-site Audit: Inspectors visit facilities to verify practices. Raw materials must be segregated, equipment sanitized, and slaughter methods must follow Islamic rituals. Any violations can lead to disqualification.

Certification Decision and Follow-up

• Certification: If all standards are met, the enterprise receives a halal certificate.
• Ongoing Supervision: Certified companies face regular or random audits. Non-compliance can result in suspension or revocation of certification, impacting market access.