Optimizing the halal food sector to support Indonesia as a leading global halal producer

Indonesia's potential in the halal industry at this time is very calculated, because Indonesia is the country with the largest Muslim population in the world. This role should not only be seen as a captive market, but also should encourage the growth of the halal industry in Indonesia that is able to compete globally. But in reality, currently Indonesia's halal food and beverage industry has not been included in the top 10 countries with the best halal food and beverage performance in the world. Whereas on the other hand, Indonesia actually has a great opportunity to develop halal products in this sector. The purpose of this study is to determine the effectiveness of Islamic economic law in the application of the halal value chain (HVC) ecosystem in the halal food and beverage industry in Indonesia. This research method uses a qualitative type of research with a descriptive analysis approach. The implementation of this researchwas carried out at food and beverage companies in Indonesia. The subject of the study was the Head of General Affairs of halal food and beverage managers and halal food and beverage employees in Indonesia. The subject was taken by purposive sampling. The researcher's goal is to take the problems that exist in the Indonesian halal food and beverage industry by implementing the Halal Value Chain ecosystem<strong>.</strong> Data collection techniques were carried out by observation, interviews, and questionnaires conducted to the Head of General Affairs of the food and beverage industry. The results of this study show that based on data from the Central Stastistic Agency (BPS) related to the Data on the Number of Halal Food and Beverage Exports in 2022 After the implementation of HVC shows that there is an increase in the export process and a reduction in the Import process, this means that the application of HVC in halal food and beverages in Indonesia is very influential so that it can increase the effectiveness of the halal product even though it has not fully run optimally. The supporting factors for the success of HVC are government support, dedicated assets, information technology, human resource management, collaborative partnerships, halal certification and halal traceability

With all the potential that Indonesia has, the halal industry should be optimised to build the economy and prosper people's lives. This study aims to look further at the opportunities and challenges of Indonesia's halal food and beverage industry. This study uses a descriptive-qualitative method with a phenomenological approach and SWOT analysis techniques. The results showed that Indonesia has excellent food and beverage industry opportunities. For example, Indonesia has high growth in the number of Muslims. The target market in Indonesia is enormous, public awareness of consuming halal food continues to increase, and technology development is rapid. The existence of e-commerce and media continues to grow. In terms of financing, there are many choices of alternative financing platforms and collaboration opportunities with Islamic banking and financial institutions. However, this opportunity has not been fully utilised. Indonesia still has to face various challenges from various sides, such as limited access to international markets, a lack of research on market movements, and the utilisation of information technology to develop this industry is still low. Meanwhile, the form of policies from the central and regional governments are still not aligned, and the bureaucracy for inter-sectoral cooperation is still relatively. By looking at the results of the positioning analysis through the SWOT technique, it is recommended that the Indonesian halal food industry implement a growth strategy through horizontal integration. In this position, the Indonesian halal food industry has an excellent opportunity to grow by developing the halal food and beverage industry.

The halal industry has emerged as a crucial sector in Indonesia, the country with the largest Muslim population in the world. With increasing global demand for halal-certified products, especially in the food and beverage sector, implementing a robust Halal Management System (HMS) has become essential for businesses aiming to meet consumer expectations and comply with national and international standards. This study explores the strategies for implementing HMS within Indonesia's food and beverage industry, focusing on challenges, opportunities, and best practices. Despite the growing awareness of halal compliance, many companies face difficulties in understanding and integrating halal standards into their operations. These challenges include insufficient knowledge, lack of skilled personnel, and complex certification processes. Moreover, companies often struggle to align their supply chain practices with halal requirements, ensuring the traceability and integrity of raw materials. However, implementing a structured HMS can enhance product quality, strengthen consumer trust, and expand market reach domestically and internationally. This study will analyze key strategies such as workforce training, technological integration for supply chain transparency, and collaboration with certification bodies to streamline compliance. By addressing these aspects, the research aims to provide actionable insights for businesses and policymakers to promote sustainable growth in Indonesia's halal food and beverage industry.

The world starts to realize about need for Muslims dietary requirement and eating known as halal. It is seen that the countries of which have high Muslim population such as Saudi Arabia, Indonesia, Turkey, Brunei and Malaysia on the other hand, non-Muslim countries for example Thailand, Singapore and the United Kingdom, have different approaches on the practices of Halal.Today from east to west, halal industry has big part for food manufacturing and getting global stage in business world. Thailand, Singapore, Indonesia, Turkey, Malaysia, Brunei just some of the examples that having full concerned about halal food by government. Malaysia, among these counties has increasing its economy and it opens new opportunities to have market in halal industry as well and today Malaysia volunteer to improve the halal industry for others and become halal hub for the world. Since halal logo and certification has big market capacity there is so many works about halal food and certification. The recent Malaysian Standard, MS 1500 mentions about halal food management, the practical strategies for the food industry, its preparation, the business of halal food and the obligations for halal standards and food trades. For halal certification Malaysia practice with the association of MS – standards 1480, food safety according to hazard analysis and critical control point system and MS 1514 which is about good manufacturing practice these two important standards’ content safeties the good and clean product for believers.The 3th section of 1975 trade Description in Malaysia is defining of halal based on the Islamic rules and law. · It does not contain anything or small part of any animal that is prohibited by Muslim law or it is prohibited in accordance with the law specified in Islam, it is forbidden by Islamic law to eat or that has not been slaughtered in agreement with Islamic law.· Does not contain anything which is considered to be not clean according to Islamic law.· Is not prepared, processed or manufactured using any instrument that is not free from anything not clean base on the Islamic law.· Has not in the course of preparation, processing or storage been in contact or close to any food that fails to satisfy Islamic rules or anything that is considered to be unclean according to Islamic law.On the other hand, despite of some rules and regulation on halal food, Malaysian consumers still struggling to understand and apply act and it is clear that it still does not affect their choice while they are consuming or buying products. There are several technologies that have been found and recognised in previous studies; those studies aim to find ways to detect non halal materials in products that are to be certified halal. For that research chemists check for porcine DNA or an unacceptable level of alcohol, for example. Also try to find alternatives to forbidden ingredients such as gelatine made from fish skin instead of from pigs and researches are very important for hall industry. There is some research working on making sure to processes used to make drugs are halal. To make vaccines and other proteins, you need to culture cells in a bioreactor.It can be said that the understanding of the halal concept is not enough clear. Muslims are giving high priority and care to halal food industry and they are more sensitive as it is regarded as an important and obligatory in their religion. Malaysia is one of the leading countries for the halal standardization, but still there are many issues and complexity about halal standards, certification, logo etc. Most of those problems are related with sensitivity of halal amongst Muslim community.Malaysia is doing its best to establish and promote the halal industries to Muslim and non-Muslim countries. It is one of the good examples for multi-race and multi-religion countries and pioneer with practicing halal standards when we look at the halal management HDC that takes authority from JAKIM. Laws and standards on halal food, halal certification process and application will be smoother and will protect the consumers. It will decrease the violation and misuse of halal concept, Malaysian halal laws and principles on this matter are considered as the strictest as per now regardless the shortcomings in implementing these standards. Issues such as the functioning of halal food certification studies in Malaysia, a success story on halal to other countries, financial and formal procedure processes of halal food studies are very important and will be an example of studies in Turkey.

Purpose This study aims to identify the factor that could be able to motivate the food industry to take part in the standardization process and analyse which motive is the most influential one. This study also examines the relationship between the motive and the implementation itself. Design/methodology/approach As one of Malaysian Standard, MS1500 is focused on halal food matters. This standard was established by the Malaysian Government to realize their dream of becoming the leader in the global halal market. However, there are still many food and beverage small and medium-sized entterprises owned by Indigenous Muslims in Malaysia who still take it for granted by claiming that their products are halal without ever signing up for the halal certificate or implementing MS1500. Findings The findings of this study can be used as an input for the Malaysian Government, so they will be able to plan any suitable programme that can promote the implementation of this standard. Practical implications The halal food industry has grown significantly around the world. By category of spending, the halal food and beverages industry holds the biggest share, with a value of about US$1,303bn in 2017 and is expected to reach US$1,863bn by 2023. These big opportunities have been captured by several countries in the world, including Malaysia. As a Moslem country, Malaysia aspires to be the halal hub and has aggressively worked towards becoming the key player in delivering halal food products. By understanding the motives behind the implementation of the halal standard by the food industry, we can develop strategies to expand the growth of the halal industry itself. Originality/value To the best of the authors’ knowledge, this is the first study of its kind that has been conducted to explore the motives behind the implementation of halal food standards by the food industry, especially in Malaysia. From the review of the current literature, it is found that studies on halal food certification and halal logo mainly focused on the consumer side instead of the industry side. On top of that, it is also found that previous studies mostly adopted two notable theories, namely, theory of reasoned action and theory of planned behaviour. To elaborate on and use plenty of other theories in performing a halal standard research, the three isomorphism pressure from institutional theory of DiMaggio and Powell has been chosen as a pertinent theory in this study. As a result, the theoretical gap and the uneven scope of halal food standard and certification research, with particular attention on the industry or manufacturer side, are expected to be bridged. This theory is also used to identify the most dominant motive. Moreover, this study examined the relationship between the motive behind standardization and the standardization itself.

The global halal industry has shown significant development, and Indonesia has become one of the countries with great potential. This study aims to identify opportunities and challenges in developing the halal industry in Indonesia. This research uses a qualitative approach. Data sources used in the form of secondary data, which comes from library sources—technical analysis of data using the SWOT analysis approach. The results showed that the development of the halal industry in Indonesia included several sectors, namely the food and beverage sector, tourism, fashion, media and recreation, pharmaceuticals and cosmetics, and renewable energy. Based on SWOT analysis, it was found that there are strengths, weaknesses, opportunities, and challenges in developing the halal industry in Indonesia. Thus, in the future, to improve the halal industry in Indonesia, it is necessary to optimize the synergy of various elements ranging from the community, industry players, government, financial institutions, associations, academics, and educational institutions, as well as other related parties.

The halal industry in Indonesia after Covid 19 has experienced growth, with Indonesia's population of 229.6 million in 2020, it has not been able to make Indonesia a supplier country for the needs of halal commodities in the world, there are many challenges that deserve joint attention to make Indonesia the center of the world's halal industry as targeted by the government in 2024 there will be two challenges in general, namely external challenges and domestic internal challenges, while opportunities for the halal industry in Indonesia are in the halal food sector, Islamic finance, halal tourism and Modest fashion. For this reason, this study aims to look at the Development of the Halal Industry in Indonesia regarding Opportunities and Challenges in the Post-Covid-19 Pandemic. This study uses a literature study, a descriptive approach, data and information collected from various literature from secondary data. Through this research, the authors hope to contribute to a portrait of the halal industry in post-pandemic Indonesia, so that they can see opportunities for development.

The halal food industry has experienced significant growth in line with the increasing awareness among Muslim consumers about the importance of using products that comply with Sharia principles. This trend is not only happening in Muslim-majority countries but also across the globe. Several countries have developed their own halal standards and recognized the potential of the global halal industry. The halal standard recognized in Indonesia is the Halal Standard by the Halal Product Assurance Agency (BPJPH), while in Malaysia, it is by JAKIM. The objective of this study is to examine and compare the halal food industry standards practiced in Indonesia and Malaysia. This research analyzes the standards and performance of the halal industry in Indonesia. The study uses a descriptive statistical research methodology by analyzing data from literature reviews of journal publications, official BPJPH reports, and websites. The halal food industry in Indonesia has experienced significant growth, driven by increasing consumer awareness of the importance of halal certification and regulatory support, especially after the enactment of the Halal Product Assurance Law (UU JPH). In Indonesia, the halal assurance system (HAS) is implemented in accordance with MUI and BPJPH regulations through HAS 23103:2012. In Malaysia, JAKIM oversees halal awareness programs and regulates food production facilities based on standards documented in the Malaysian Halal Management System (MHMS) 2020, the Malaysian Halal Certification Procedure Manual 2014 and 2020, and MS 1500: 2019 (Halal Food).

The natural wealth in Indonesia is a big potential in Indonesia's economic development in the future, especially in the halal food industry. The development of halal food and drinks continues to increase along with the growth of the Muslim population in Indonesia. This study aims to look at the condition of the halal food industry in Indonesia and everything related to the halal food industry as well as the dangers, opportunities and threats to halal food from international market penetration. In order to develop the halal food industry in Indonesia and the world, it is necessary to have halal equality in each country and to have halal food certification. So that they are not involved in the halal food industry such as restaurants, cafes and other food places that have special regulations that prohibit the halal food industry. In this export process, a product must pass quality assurance certification. Among the names of product quality assurance agencies is ISO (International Standardization Organization). To get a product guarantee license is very difficult because developing countries like Indonesia and developing countries do not pay attention to product quality such as developed countries. However, Indonesia has the opportunity to develop halal standardization such as ISO quality assurance certification, seeing the large Muslim population in Indonesia as regular consumers of halal food products. With this opportunity, it is hoped that the government or related agencies can develop the Indonesian halal food industry so that Indonesia will not only become a target market for products but become a major player in the marketing of halal products. The research research method used is descriptive qualitative with literature data sources.

Background and Purpose: Sadd al-dharai' is a secondary source in Islamic law where it means blocking the means. Sadd al-dharai' is essential for Muslim jurists to deal with the Shariah issues particularly in the halal food industry. This is because the area of the halal food industry has expanded and industrialized to accommodate the demand of the Muslim society that keeps increasing year on year. In this regard, the halal-related issues are getting complex and need Shariah clarification since many new food processing involving critical ingredients, equipment, and multi-process which require meticulous Shariah observation on this matter. Therefore, this study aims to investigate the extent to which the employment of the sadd al-dharai' as a credible tool adopted by Muslim jurist in dealing with the halal-related issues triggered in the halal food supply chain stage based on the halal certification process.
 
 Methodology: This reviewed paper is a qualitative research study in nature where document analysis employed in this study to collect the data. The Malaysian fatwas, books, articles either in the form of physical or online were gathered to answer the objective of the study. The data collected mostly from the years of 2010 until 2020 unless the related fatwas where the fatwas are subject to its issuance year and suitability. The researchers used several keywords alternatively like ‘sadd al-dharai' in halal industry’, ‘fatwa and halal certification’, ‘food industry and Islamic law’ to find out relevant articles related to this discussion on the needs to investigate the employment of sadd al-dharai' in dealing with the halal-related issues triggered in the halal food supply chain stage based on the halal certification process. This study further simultaneously adopted the content analysis technique where the data was manually analysed and divided into four major themes based on the objective of the study. 
 
 Findings: The study has indicated that sadd al-dharai' has its peculiar function in many aspects of the Malaysia halal certification process in Malaysia, and it could be viewed based on the two approaches, namely the establishment of the halal regulatory framework and the fatwa issuance. The principle of preventing the negative aspects must take precedence, in accordance with the rule “dar’u al mafasid muqaddam ‘ala jalb al-mashalih” by adopting several preventive actions is very significant in ensuring the halal food products reach the consumers are halalan tayyibban.
 
 Contributions: This study suggests that the Muslim jurists need to take into consideration the sadd al-dharai‘ as one of the sources of Shariah in ensuring the management of the halal certification process is efficient and in line with maqasid al-Shariah. Besides, Muslim consumers could also access halal food products that are free from harmful elements.
 
 Keywords: Halal certification, halal food, sadd al-dharai', food safety, food ingredients.
 
 Cite as: Ruzulan, Z., Mana, B., Tumiran, M. A., & Jamaludin, M. A. (2023). Managing the halal food related issues in the halal food certification process based on the concept of sadd al-dharai'. Journal of Nusantara Studies, 8(1), 429-445. http://dx.doi.org/10.24200/jonus.vol8iss1pp429-445

The development of the halal industry in Indonesia has major challenges such as the lack of ability to attract the interest of millennial Muslims in the world to become consumers of halal products, awareness of halal food requirements, perceptions of compliance costs and costs associated with the procurement of halal ingredients, production of halal products, and supply chain management. The purpose of this study is to identify trade opportunities and the halal value chain and identify supporting factors for Indonesian halal product exports in driving a sustainable national economy. The research method used is the Autoregressive Distributed Lag (ARDL) model, which aims to analyze the effect of exogenous variables on endogenous variables over time. The research variables consist of the export value of the halal food and beverage industry, the export value of Muslim fashion, the export value of halal pharmaceutical and cosmetic products, the global value chain, and economic growth. The results of the study indicate that in the short term, the export of the Indonesian halal industry and the global value chain affects economic growth at different lags. Furthermore, in the long term, economic growth is influenced by the export value of the halal food and beverage industry and the global value chain. Thus, to maintain and achieve the sustainability of the halal value chain, efforts are made to facilitate exports, increase the productivity of the halal industry, attract investment, and promote halal certification.

Purpose – The purpose of this paper is to assess the level of knowledge, halal dietary quality assurance practices, and commitment among food industries in the implementation of halal in Malaysia. Besides, the study was based on two categories that are considered major contributors in the chain of halal food sector in Malaysia which are the multinational, and small medium enterprise (SME). Design/methodology/approach – Two company’s categories related to halal food and beverage industry which are the multinational, and SME were chosen in this research based on the similarities in terms of functions and needs in the implementation of halal in Malaysia. Furthermore, both categories are the main groups in the halal food sector that support the growth of other categories. The sample of the study was comprised of 241 companies from halal certification holders (MNCs=69; SMEs=172).Cross-sectional study through random sampling and purposive sampling was used where the internal halal committee who have been specifically appointed in the organization were asked to fill in the questionnaire. Personally hand-delivered questionnaires in workplaces was used as a method of data collection. The data were analyzed using SPSS version 21. Findings – Based on the analysis, it was found that the level of knowledge, halal quality assurance practices and commitment to be at a good level. Whereas the results of inference showed that there are significant differences for the three variables studied. Research limitations/implications – In the study there are some limitations, namely; first, the categories studied are focussed solely on halal food industry. Halal now been expanded to other products such as pharmaceutical, logistics, etc. Second, the standards used are the standard and guidelines on the handling of food. Finally, the limitations in obtaining more respondents as most industry in Malaysia is still concerned to provide feedback and view it as the secrecy of the company. Practical implications – First, the implication of the theory and literature studies in which the research prevalence is associated with the ISO quality and quality management, integration of multiple disciplines and concepts is essential as a combination of elements of human capital and strategic management. Second, on behalf of the government or specially-appointed halal certification body, it can give a clear picture of the exposure and promotion related to the deed, procedures, and guidelines have gone through several changes and amendments. In addition, it is also able to evaluate the effectiveness of a number of conditions that are required such as internal halal appointment committee. Third for industry practitioners, focussing in delivering halal standards is not dependent on the system, working patterns, and technologies alone, but should also take into account the element of human capital and organizational responsibility in maintaining halal integrity and enhancing the knowledge and halal dietary management in accordance with the requirements of Islamic law and fatwa. Social implications – On behalf of the users, the confidence is there and in order to produce a halal product, it involves a fairly strict chain and has always been regulated by a special committee whose role are meeting the needs outlined halal standards. Originality/value – The study is the starting point in discussing in detail about the halal knowledge, halal quality assurance, and commitment after the standardization and harmonization of halal certification in early 2012. Furthermore, there are a few revisions on the act, standards, and procedures by the halal certification body, which halal assurance should be implemented and considered still new.

The market for the halal food and beverage industry sector has experienced rapid growth in recent years, which indicate excellent investment opportunities. This paper examine the effect of Technical Efficiency (TE) on firm value in 5 selected influential countries in halal food and beverage sector based on Global Islamic Economy Report 2020. Two steps estimation was used to run the data, using the Stochastic Frontier Analysis (SFA) model to determine the company’s TE and panel data to test the effect of TE through firm value. The results show that Indonesia has the highest score for TE (62%), followed by Pakistan (59%), South Africa (57%), Malaysia (55%), and Singapore (52%), which means, in general, there is inefficiency in allocating resources over 38% up to 48% and needs to be improved by halal food and beverage companies in. Regarding panel data, all countries sample except Pakistan highlight that TE significantly affect company value. It indicates that the crucial part of managing efficiency can be a sign in stock market performance. The result shows that company managers should set efficiency strategies to their business process for creating sustainability and increase their value in the capital market. As for investors, this TE can be used as an indicator before choosing company stocks; if the company is efficient, then it is worthy of being one of the portfolio assets. Form the government side, the finding can help them to set appropriate policy setting to boost halal food and beverages industry such as giving subsidy or incentive to increase the efficiency ability of halal food and beverage companies and identify the industry’s strength by comparing the result of TE between 5 countries.

The market for the halal food and beverage industry sector has experienced rapid growth in recent years, which indicate excellent investment opportunities. This paper examine the effect of Technical Efficiency (TE) on firm value in 5 selected influential countries in halal food and beverage sector based on Global Islamic Economy Report 2020. Two steps estimation was used to run the data, using the Stochastic Frontier Analysis (SFA) model to determine the company's TE and panel data to test the effect of TE through firm value. The results show that Indonesia has the highest score for TE (62%), followed by Pakistan (59%), South Africa (57%), Malaysia (55%), and Singapore (52%), which means, in general, there is inefficiency in allocating resources over 38% up to 48% and needs to be improved by halal food and beverage companies in. Regarding panel data, all countries sample except Pakistan highlight that TE significantly affect company value. It indicates that the crucial part of managing efficiency can be a sign in stock market performance. The result shows that company managers should set efficiency strategies to their business process for creating sustainability and increase their value in the capital market. As for investors, this TE can be used as an indicator before choosing company stocks; if the company is efficient, then it is worthy of being one of the portfolio assets. Form the government side, the finding can help them to set appropriate policy setting to boost halal food and beverages industry such as giving subsidy or incentive to increase the efficiency ability of halal food and beverage companies and identify the industry's strength by comparing the result of TE between 5 countries.

The halal food industry is a potential sleeping giant. The 1.3 billion or more Muslims in the world represent 20 to 25 percent of the world’s market, and with 57 countries in the Organization of the Islamic Conference (OIC) the need for halal foods, cosmetics, and pharmaceuticals is large and growing because of both population growth and an increased purchasing power in the Muslim world. Particularly central to the Muslim way of life is the availability of halal foods that are produced so as to be consistent with the requirements of different Muslim communities but which are absolutely trustworthy and are clearly presented as halal. Getting to that point will require an effort by the Muslim community to clearly and respectfully define their standards, while recognizing that no one standard will cover the needs of all Muslims. The Muslim community then need to work with the food industry and the Muslim certifying agencies to see that a system is created that can serve their needs in a cost-effective manner that also provides a truly halal and tayyab (wholesome) food supply for Muslims in all countries, whether Muslim majority or not.