On October 17, Indonesia introduced mandatory halal certification for food and beverage products; all products distributed in Indonesia, whether domestic or imported, must be halal labelled. However, on the same day, the deadline was extended by two years for imported products and domestic micro, small, and medium-sized enterprises (MSMEs).
Although the timeline for halal certification has been known for several years, the October deadline came too soon for Indonesian micro, small, and medium-sized enterprises.
The bureaucracy and costs associated with certification process have been overwhelming for MSMEs. In response, the government has decided to grant free certificates to the sector and has given them two extra years to meet the requirements. This extension also applies to foreign imports.
Despite the challenges, MSMEs see the halal label as essential, as 87% of Indonesia’s population is Muslim. Additionally, it’s viewed as an opportunity for growth in domestic and export markets since halal products can reach all consumers, whereas non-halal products are limited to non-Muslims.
The halal label as a gateway to global Muslim markets for Finnish products
Halal means permissible. It is a fundamental concept in Islamic law, with its opposite being haram or forbidden. For Finns, halal is familiar in the context of halal slaughtering and is typically associated with food and drink products.
However, for Muslims, halal encompasses all actions permissible under Islamic law related to areas such as eating, drinking, consumption, healthcare, travel, and business. The halal label ensures that religious purity guidelines are observed in production, using only permissible ingredients and performing specific rituals.
In addition to food and beverages, in October 2026, Indonesia will expand halal labeling to traditional medicines, functional foods, cosmetics, chemicals, genetically modified organisms, clothing, household appliances, stationery, and class A medical equipment. Over-the-counter drugs and Class B medical devices will follow in 2029, with Class C prescription drugs and medical devices by 2034.
Non-halal products, such as pork and alcohol, may still be sold in Indonesia but must be labeled as non-halal, with non-halal ingredients highlighted on product labels.
Halal markets as a growing consumer trend
The global halal market was valued at $2 trillion in 2021 and is expected to grow to $2.8 trillion in the coming years. There are 1.9 billion Muslims worldwide who check if a product is halal before making a purchase.
The food and beverage industry currently has a significant share. Still, growing halal sectors include the cosmetics, pharmaceutical, and tourism industries.
Halal is branded as a modern lifestyle for Muslim consumers, symbolizing cleanliness, health, and sustainability in ways similar to Finnish certifications, like the iconic Swan label or Key Flag symbol.
In Finland obtaining Indonesia’s halal label remains a challenge
Many Finnish food exporters are familiar with halal certification. Indonesia’s certification process is known for its comprehensiveness and rigor, and it does not automatically recognize halal certificates issued by other countries, such as those in neighboring Malaysia.
”There are already some halal certification bodies (HCBs) accredited by Indonesia in EU countries, but Indonesia requires certification to be conducted in the exporting country,” explains Kaj Suomela, CEO of Green Change Consulting Oy.
In practice, this means that Finnish exporters cannot certify their products within the EU or nearby countries, and the only current option is to bring halal auditors from Indonesia to Finland.
”This is an unsustainable situation, especially for small and medium-sized businesses. We need our own certification body, HCB, in Finland, and it requires broad support from various stakeholders,” Suomela asserts.
Suomela, together with Seven Stones Finland, is exploring establishing a halal certification body (HCB) in Finland. According to Indonesian experts, this is entirely feasible.
”The main challenges currently are Finland’s small export volumes and funding for the establishment, but as volumes grow, the operations would become self-sustaining,” estimates Tanja Harjuniemi, CEO of Seven Stones Finland.
Translated in English from the original Finnish text by ChatGPT. Read the original text: https://sevenstonesfinland.com/kaakkoisaasia/indonesia/indonesian-pakollisen-halal-merkin-kayttoonottoa-lykattiin-kahdella-vuodella/
Read more about halal procedures in Indonesia: https://sevenstonesindonesia.com/blog/halal-certification-a-gateway-to-indonesian-markets/