Go East: Russian halal food eyes ASEAN market

THE halal food industry in Russia is growing, especially in the predominantly Muslim areas such as Dagestan and Chechnya in the South and Tatarstan in the Volga River basin.

Most companies there already have expertise in exporting their products to Gulf nations. They are increasingly looking to expand to the Southeast Asian region, into markets like Malaysia. Understanding the halal requirement for ASEAN countries, especially Malaysia, is crucial as they vary from country to country.

For instance, the Department of Islamic Development Malaysia (JAKIM), the agency responsible for Islamic affairs, has strict requirements to issue a halal certificates.

JAKIM requirements cover everything from the products itself and its production methods - including raw materials, ingredients, processing equipment, other handling equipment’s used in the process of manufacturing. It adheres to the Islamic law (Shariah Law) requirements.

The Russian Muslim way

Despite Russian Orthodoxy being the most professed religion in the 145 million population nation, there is a vast potential for halal food market. There are approximately 25 million Muslims that make Russia as home with four million in Moscow alone.

With that figure, the halal food sectors covering meat, dairy products and other items consider fit for Muslim consumption under the tenets of Islam is expected to grow.

In Tatarstan alone, the ministry of food and agriculture said that the value of halal products produced in 2020 reached RUB10 billion ($137 million), or 3% of the republic gross agriculture output value. Tatarstan exports to the rest of Russia and abroad some $300,000 worth of halal products in 2019, with the number jumping to $2.5 million in 2020.

However, the wide market potential also creates issues especially in ensuring that the products produced meet international halal requirements, and enforcement in ensuring that the certificate are not misused.

“It’s very hard to manage Halal products in the market, each of the Muslim center in the region has its own certification,” said Radik Amirov, a Muslim Business Consultant based in Moscow.

“The bigger issue is not just the absence of authorities that can control in issuing halal certificates and but also lack of law enforcement against parties who misuse halal certificates,” he said.

Traditionally in Russia, stalls, eateries, and restaurants were known to be halal through word of mouth. The Islamic greeting from sellers and symbols on the walls with the signs saying “halal” or “helal” were enough assurance.

This dishonest certification practice hinders the growth of the halal market, making it difficult for halal products to develop its international markets, especially in ASEAN market due to its strict halal criteria.

“There are also cases where international investors who come to Russia to establish cooperation in halal products but meet a dead end because we are unable to prove that our products are halal and organised,” said Amirov.

Latest data from 2017 suggest that there are over 200 certified producers in the country with certification awarded by the International Center for Halal Standardisation and Certification of the Russian Mufti Council.

Efforts are on its way

Despite the challenges to expand halal food industries in Russia, things are much better than it was a decade ago with efforts taken by entities such as Russian-ASEAN Business Council (RABC) to ensure the continuity of the market not just in the country but abroad.

“That’s why we are cooperating with the government trying to set clear institutional understanding on how halal certification should be implemented for all production facilities,” says RABC Chief Executive Officer, Daniyar Akkaziev.

“For example, RABC is working hand in hand with Muslim religious department of Russia and Muslim Council of Russia for the past year. We conduct webinars to discuss halal industry certification issues with ASEAN countries so that we can move forward,” says Akkaziev.

In Malaysia, JAKIM is the country's statutory halal certifier for not only food items but also other products such as kitchen appliances and cosmetics, unlike Russia.

“In Russia we have several centers that produce halal certification, but they are not united under one agency, it is not centralised. The challenge now is to make it centralised, so that one agency is responsible for everything,” he said.

“Once it centralised, our partners in ASEAN will have more clarity. For now, we can export to countries like Malaysia, and we hope the process of acquiring the halal certificate can work seamlessly after this," says Akkaziev.

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The materials were prepared as part of the InteRussia internship program at Sputnik News Agency and Radio with the financial and organizational support of the Gorchakov Fund.