Halal Logo Becomes a Competitive Advantage

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"The halal logo has become the world's standard and barometer that determines product quality. Therefore, currently halal has become a universal phenomenon that is appreciated by various nations." – Indonesia's Sharia Economy Masterplan 2019-2024

The halal issue that has been discussed a lot recently has slowly led business actors to carry out halal certification of their products. Moreover, this is also strengthened by the enactment of Law Number 33 of 2014 concerning Halal Product Guarantee (JPH Law) 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. Currently, a halal certificate is a guarantee that a particular product has been thoroughly investigated and declared in accordance with Islamic sharia law. Therefore, the display of halal logos and certificates is legally able to convince Muslims to consume these products.

In Indonesia, for example, there is only one recognized halal logo, namely the MUI Halal logo. This logo is well known all over the world and is recognized by various halal certification bodies. Products that include halal labels are the main choice of Muslims nationally and globally. In the global arena, until today there are 45 halal certification bodies recognized by LPPOM MUI from 26 countries. All of them consist of 37 institutions for the slaughtering category, 40 institutions for the raw material category, and 22 institutions for the flavor category.

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

Halal certification by MUI plays an important role because it is defined as the inspection of the process of a particular product and meets hygienic, sanitary, and safety requirements. Products that are certified halal by the board can use the registered trademark halal logo. Therefore, Hughes and Malik (2017) in the Sharia Economy Masterplan of the Republic of Indonesia 2019-2024 consider halal certification as the key that allows for the successful development of the global halal industry. A 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, which are also quoted from the Sharia Economy Masterplan of the Republic of Indonesia 2019-2024, say that halal certification will be a contributing factor to consumers' purchasing decisions. Meanwhile, failure to get halal certification will be a relatively large loss for entrepreneurs.

With halal certificates, now a number of multinational companies see a clear opportunity 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 have been certified halal. Then the large scale of production and the wide market share until it enters the international market makes large companies of packaged food and beverages become major players in the halal food and beverage sector. (*)

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