The Indonesian market offers a lot of potential with a 261 million people population; it also boasts the largest Muslim population in the world: 227 million.
At today's Cosmetics Business Regulatory Summit, DKSH's Robert Koller, Senior Director of Regulatory Affairs, educated attendees about Indonesia's soon-to-be implemented halal regulation, which would be a barrier to trade with this up-and-coming market.
Koller told attendees that there is no set definition of halal and haram, which are terms used in the Quran to distinguish between lawful, or allowed and unlawful, or forbidden. Some interpretations are strict and some are more flexible, with some interpretations allowing Muslims to opt for non-halal depending on the circumstance, for example medication.
Indonesia's Law 33/2014 is less pragmatic. When it comes into force in 2019 (for the past five years it has been voluntary), it will result in the mandatory labelling and certification of all foods, beverages, drugs, chemicals and (of course) cosmetics sold in Indonesia as halal.
The law will demand clarity regarding the raw materials used, equipment and processing used and the formulation of the final product.
The halal certification authorisation body will be the Halal Product Assurance Agency (BPJPH), replacing the Indonesia Ulama Council (MUI), Koller told Summit attendees, while verification will be carried our by the Halal Inspection Institution (LPH).
BPJPH certificates will be valid for four years, as opposed to two under MUI, and for those companies certified under MUI, there will be a transitional phase during which these certificates will be acknowledged by BPJPH until expiry.
Interestingly, products from overseas with foreign halal regulation might be acknowledged in Indonesia, although this is not automatic and is subject to cooperation between the involved governments.
Although the process has faced challenges and implementation might see delays as a result of the Indonesian presidential elections next year, DKSH's Koller, concluded, saying: "If you are exporting to Indonesia, you should get ready and have a strategy and plan in place for 2019."
Following Koller and also discussing halal was Salma Chaudhry, founder of halal-certified beauty brand Halalcosco. She explained that her company's founding principles were halal, safety, quality and the avoidance of 'najis' and 'mutanajis' – Arabic terms meaning 'unclean' and something "that started off as clean but has been cross contaminated", respectively.
Initially, Halalcosco was certified by the Halal Monitoring Committee (or HMC) – a respected UK body. However, when Chaudhry took the brand international, she realised that each country had different accreditation rules.
"When you're choosing a body, a big tip is to look at country you are hoping to export to and its specifications," she said. For example, Malaysia and the Middle East both recognise the Halal Food Authority (HFA) certifying body, so Halalcosco is now certified by HFA.
For each certifier, Chaudhry said it is important to understand what the accreditation process will involve; for example, some inspectors will only give accreditation if the contractor's manufacturing line is dedicated to only halal cosmetics.
Ingredients need to be traceable from sourced and any handling at destination points must be accounted for. You then have plant audits, and additions, such as fragrances must be halal (for instance, fragrances must not contain alcohol).
One factor Chaudhry flags up is cost. What types of product and what numbers of product need to be certified? And what are the costs for travel and accommodation of compliance officers? Don't opt for UK-based certification if you have to fly them to factories in Europe, she joked!
Other potential money burners involve the cost of logo use, annual renewal fees and certification for consignment export on customs documents.