Indonesian F&B Companies Struggle with Halal Certification Requirements

Industry players, particularly in the food and beverage sector, face significant challenges in complying with Indonesia’s new halal certification regulations. Enforced under the Halal Products Guarantee Law in October, this legislation mandates that all products and services deemed non-haram must obtain halal certification. The law shifts the authority for issuing halal certifications from the Indonesian Ulema Council Assessment Institute for Foods, Drugs, and Cosmetics (LPPOM MUI) to the Halal Certification Agency (BPJPH), part of the Ministry of Religious Affairs. However, LPPOM MUI remains responsible for evaluating, testing, and approving products.

Challenges with Product Reaudits

A major hurdle for producers is the requirement for product reaudits each time new ingredients are introduced. According to Doni Wibisono, head of public policy at the Indonesian Food and Beverages Producers Association (GAPMMI), even minor changes, such as altering a product’s flavor, necessitate a full reauditing process. Previously, producers only needed to verify the safety of new ingredients, a simpler process that is now more complex and time-consuming.

Ian Saputra Widjaja from Taiwan Shih-Lin Street Snacks echoed these concerns, noting that frequent reaudits are proving troublesome for many food and beverage producers.

Halal Certification in Transportation and Storage

The new regulations also extend to halal certification for transportation and storage. Raden Didiet Rachmat Hidayat, a transportation expert from Trisakti University, highlighted that the scarcity of halal-certified warehouses and transport operators exacerbates the problem. Currently, there are only three halal-certified warehouses in Indonesia—one operated by a state-owned enterprise (SOE) and two by foreign firms from Singapore and Japan. Additionally, PT Iron Bird Logistics, a subsidiary of Blue Bird, is the only halal-certified transportation operator, and no halal-certified distribution operators exist in the country.

Hidayat attributes the limited availability of halal logistics infrastructure to conventional logistics companies’ lack of awareness and reluctance to incur the costs of certification.

Impact on Vaccine Production

The regulations also affect sectors beyond food and beverage. For instance, SOE Biopharma, a vaccine manufacturer, faces challenges because some vaccines require non-halal materials. According to Biofarma’s corporate communications head Iwan Setiawan, even if the final product contains no non-halal ingredients, regulations stipulate that there must be no exposure to non-halal items during production. This means that any change in materials requires retesting of the vaccine.

Regulatory Uncertainty and Administrative Burdens

The enforcement of these new regulations remains inconsistent. In Central Sulawesi, retailers have been instructed that all products must be halal certified, despite a certification deadline set for 2024. Retailers like Alfamart and Indomaret have sought clarification from BPJPH on displaying and selling uncertified products but have yet to receive a response.

Furthermore, producers must now register their products with both BPJPH and the Indonesian Food and Drug Monitoring Agency (BPOM), leading to duplicated efforts and added complexity.

Calls for Regulatory Reform

Ikhsan Abdullah, executive director of Indonesia Halal Watch, has called on the government to streamline halal certification regulations as part of the omnibus law agenda. He argues that the current rules are overly cumbersome and hinder companies’ ability to comply, despite the mandatory nature of the certification.

Lukmanul Hakim, the vice president expert staff member, has assured that the government is considering integrating halal regulations into the omnibus law formulation. This move aims to strengthen and empower the halal industry by addressing the existing challenges and improving the certification process.

The Halal Products Guarantee Law presents significant challenges for Indonesia’s food and beverage industry and beyond. The new requirements for product reaudits, transportation, and storage are causing considerable difficulties. As the government works to streamline regulations and address industry concerns, stakeholders must stay informed and prepared to navigate these changes effectively.