Halal Logo Becomes Competitive Advantage

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“The halal logo has become the world standard and barometer that determines product quality. Therefore, at this time halal has become a universal phenomenon which is appreciated by various nations. “- Indonesian Sharia Economics Masterplan 2019-2024

Halal issues that are being discussed a lot lately slowly lead businesses to certify halal of their products. Moreover, this was also strengthened by the enactment of Law Number 33 of 2014 concerning Halal Product Assurance Act which was passed on October 27, 2019. 

This makes halal certification an important instrument in the success of the global industry, especially the halal world. By having a halal certificate, the product will have many competitive advantages. At present, halal certificates are guarantees that certain products have been thoroughly investigated and declared in accordance with Islamic sharia law, therefore, the ability of halal logos and certificates to legally convince the Muslims to consume these products.

In Indonesia, for example, there is only one recognized halal logo, the Halal MUI logo. This logo has been known throughout the world and is recognized by various halal certification bodies. Products that bear the halal label are the main choices of Muslims nationally and globally. On the global scene, to date there are 45 halal certification bodies that are recognized by LPPOM MUI from 26 countries. All consisted of 37 institutions in the slaughtering category, 40 institutions in the raw material category, and 22 institutions in the flavor category.

(Also read: Now, there are 22 LSHLN forthe Flavor Category)

Halal certification by the MUI plays an important role because it is defined as examining certain product processes and meeting hygiene, sanitation and safety requirements. Products that are halal certified by the board can use the halal logo registered trademark. Therefore, Hughes and Malik (2017) in the Sharia Economic Master Plan of the Republic of Indonesia 2019-2024 consider halal certification as the key that enables the development of a successful global halal industry. Competitive advantage is gained by companies with halal certification, especially if they want to penetrate the Muslim community in many countries.

Meanwhile, several other opinions were also quoted from the Master Plan for Sharia Economics of the Republic of Indonesia 2019-2024, saying that halal certification would be a contributing factor in consumer purchasing decisions, whereas failure to obtain halal certification will be a relatively large loss for entrepreneurs.

With a halal certificate, a number of multinational companies now see clear opportunities in developing Muslim-friendly products. Large industries still dominate the halal food and beverage market because all products sold both for domestic and foreign markets are already halal certified. Then the large scale of production and broad market share to enter the international market made large food and beverage packaging companies become major players in the halal food and beverage sector. (*)

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