Malaysia’s Halal Industry Addressing Challenges and Driving Global Growth

Halal has become an integral part of daily life for Malaysia’s majority Muslim population. Globally, at a time when conventional markets are reaching saturation, Muslim consumers are placing increasing importance on Islamic principles in their everyday choices, driving rapid growth in halal-related industries. These industries span food, beverages, medicines, cosmetics, tourism, finance, and even logistics and hardware, contributing to a global halal market estimated at $4.5 trillion to $5 trillion annually.

While many Muslims adopt elements of Western lifestyles, there is a growing emphasis on religious adherence, reflected in a strong preference for halal and toyyibaan (ethical and wholesome) products. The concept of halal extends beyond food to ensure that all practices, from sourcing materials to production and service delivery, align with Islamic law. Toyyibaan, on the other hand, encompasses broader ethical values, promoting cleanliness, health, sustainability, and community responsibility. Together, these principles influence diverse aspects of the halal economy, including management practices, supply chain integrity, and community relations.

Halal guidelines prohibit the consumption of pork, blood, alcohol, carnivorous animals, and improperly slaughtered livestock, among other restrictions. However, globalization and advancements in biotechnology have introduced challenges, such as verifying the halal status of new formulations and products, particularly those using animal-derived ingredients.

Malaysia has positioned itself as a leader in the halal industry, with the Malaysian Islamic Development Department (JAKIM) as the country’s statutory halal certifier. However, JAKIM’s capacity to meet the evolving demands of the international halal market is under scrutiny. Unlike Thailand’s Halal Science Centre, which leads in research and development with advanced detection systems like Hal-Q, JAKIM lacks dedicated forensic laboratories and comprehensive supply chain tracking protocols. Thailand’s proactive approach has enabled it to outpace Malaysia as a hub for halal food manufacturing and logistics, attracting multinational businesses and setting global standards.

Efforts to enhance Malaysia’s halal industry have faced setbacks, including infrastructure challenges, corruption allegations, and bureaucratic inefficiencies. High certification costs, coupled with alleged bribery demands from officials, have discouraged small and medium enterprises (SMEs) from seeking halal certification. Reports of corruption have tarnished public trust, with many local businesses turning to alternative methods, including unverified halal logos, to avoid complex and costly procedures.

Research indicates that only 40% of halal-certified products in Malaysia come from Muslim businesses, with multinational corporations dominating the certification landscape. This disparity highlights systemic issues, such as JAKIM’s limited enforcement capabilities and a lack of transparency in its certification process. Allegations of officials soliciting bribes have further damaged its credibility, prompting calls for greater oversight by the Malaysian Anti-Corruption Commission (MACC).

The future of Malaysia’s halal industry depends on addressing these challenges. Innovations such as coupling halal certification with ethical business ratings, incorporating advanced supply chain tracking, and decentralizing the certification process to state-level bodies could help restore trust and enhance competitiveness. Streamlining application processes, expanding halal education, and addressing corruption at its root are critical steps in safeguarding the integrity of Malaysia’s halal certification system.

Despite these challenges, halal remains a cornerstone of Malaysia’s identity and economy. JAKIM has reaffirmed its commitment to transparency and integrity, urging stakeholders to provide evidence of corruption to ensure accountability. As the global demand for halal products continues to grow, Malaysia has an opportunity to reinforce its position as a trusted leader in the halal market by fostering innovation, ethical practices, and sustainable growth.