TT-786 (Tourism Edition) -- Hurdles of Halal

Japan Travel
* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie
Lloyd, a long-term technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

Tourism Sector Edition Sunday, December 21, 2014, Issue No. 786

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+++ HURDLES OF HALAL

Japan has set a target of having 20m tourists a year visiting the
country by 2020, just 5 years from now. The current rate of visits,
annualized, is roughly 14m. We think they will hit their target
easily, by virtue of three key trends/events: i) the increasing wealth
of SE Asia and the popularity of Japan there, ii) the cheaper yen --
something that might continue for a while, and iii) the easing of visa
requirements for certain countries.

This last development is something that is entirely in the hands of
government, and allows them to turn the tourism taps on and off
according to economic need and political tolerance. Early next year
the industry will be eagerly anticipating a large increase in visitors
from Indonesia. Most of us think that within 2-3 years that country
will be one of Japan's top 3 source countries.

Not just Indonesians to Japan, Muslim tourism itself is huge globally.
The latest Dubai Islamic Economy Development Center (DIEDC) report
says that global Muslim spending on tourism (outbound, but not
including pilgrimages) increased 7.7% in 2013, to reach US$140bn. As a
percentage of overall global tourism spending, Muslim travelers
accounted for a healthy 11.6%. The top sources of Muslim travelers
were Saudi Arabia (US$17.8bn), Iran (US$14.3bn), UAE (US$11.2bn),
Qatar (US$7.8bn), Kuwait (US$7.7bn), and surprise, surprise, Indonesia
at US$7.5bn.

Along with tourism, the Muslim market for food and beverages,
especially Halal food, is also growing rapidly. Halal accounted for
17.7% of global food expenditure in 2013, up from 2013. The top
country for demand was Indonesia, which with 13% of the world's
Muslims and being the largest Muslim nation (about 88% of Indonesians
are Muslim), consumed US$190bn of Muslim food. Turkey was next with
US$168bn, then Pakistan with US$108bn.

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So perhaps it is reasonable that the Japanese government and tourist
industry has been wrestling recently with how to look after its
growing number of Muslim travelers -- especially for food, cosmetics,
and toiletries.

Halal certification is a good example of how religion is whatever you
want it to be. There are shades of grey in all areas of human
existence and Islamic rules are no exception. After talking to a
number of players in the market I have come to the conclusion that
there is no reliable single source of Halal certification. The
strictest and best organized seems to be Malaysia's Department of
Islamic Development of Malaysia (JAKIM), which is under the control of
the Ministry of International Trade and Industry in that country. But
there are other potential competitors such as LPPOM MUI in Indonesia
and the HIA in Saudi Arabia. Given the size of the global market for
Halal, it's no wonder these organizations are competing so intensively
for mindshare and eventual control.

JAKIM has a directory of Halal certifiers it has approved around the
world, and currently only two are listed for Japan. The fact that
there are at least several dozen so-called Halal "certifiers" (i.e.,
representing other national bodies besides Malaysia) already active in
Japan, we can see the tussle between competing organizations to define
and control the global Halal sector. The Saudis would like to have
their HIA, established by Royal Decree, take the lead, but it seems
that the Malaysians are further along in the commercial process.

I'm sure this is bewildering for the Japanese, who like clear-cut
regulations, and so the Japanese government has announced that it is
going to survey all the domestic players in the Halal business --
meaning certifying companies, restaurants, food preparation companies,
cosmetic companies, etc., to "help ensure that halal food offered by
domestic restaurants (and presumably later, cosmetics in the non-food
marketplace) complies with Islamic tenets."

My guess is that this survey is a front for consensus building and
that in fact the government is getting ready to announce recognition
of JAKIM as the nation's master authority for Halal certification.
JAKIM is already issuing Halal marks to Nestle, Unilever, Danone, and
other major brands active in SE Asia (not just Malaysia), and the body
oversees a list of about 173,000 halal products and services.

Once the Japanese government does pull the trigger, this will
eliminate the fear, doubt, and opportunism that exist in the market at
present and will probably trigger a mini-boom in Halal activity. Then
I am sure it won't be long before Japan starts exporting farm produce,
cosmetics, and other products to Islamic countries.

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Probably most readers know that Halal involves not only killing
livestock to religious rules (e.g., not severing the spinal cord,
killing from live state, draining of blood, etc.), removing pork and
alcohol from the diet, but also ensuring that the factories supplying
those foods have followed the same rules. This can get complicated for
modern organizations. For example, what do you use in replacement of
alcohol to disinfect food processing surfaces?

Cosmetics and seasonings have to follow the same rules. Heck, there is
even a certified Halal transportation service run by Nippon Express,
although I understand that they are struggling somewhat to decide
exactly what elements in the trucking business are governed by Halal
tenets and what is just hardware. At least, they seem to have decided
that they will not carry non-Halal products or alcohol in delivery
trucks that are allocated for Halal.

So, all is good, right? We're on the way to becoming a Halal paradise?
I had the idea of importing Meals Ready to Eat (MREs) made for Halal
consumers, and offer them to restaurants around the country, as a
backup for religious eaters. You can get retort pouched Halal Beef
Stew for around US$3/pouch in volume -- good enough that restaurants
will keep them around for tourism emergencies...

http://bit.ly/1CmZzle

On a recent business trip to Indonesia I put that idea to a number of
potential business partners there and was told, "Well yes, most
Muslims want to follow their faith properly, but..." the fact is that
when they are overseas they know that they can't control their
environments and generally look forward to doing things differently.
Eating the same food as they can get at home kind of defeats the
purpose of going to a foreign country -- especially one with as many
delicious foods as Japan. Then, for some, there is also the
opportunity to be away from prying eyes and to imbibe in some
forbidden pleasures (a sake or two)...

So, it could be that all the excitement over providing Halal meals
might meet with little or no interest by our new visitors, because
many of the first wave are likely to be the urban rich, who are
generally more flexible and adventurous than their pious country
cousins. That is sure to create disappointment to those in the
industry investing in creating a Halal-compatible environment.

Anyway, to try a nice Halal restaurant, even if just to see what is
possible (it's not all beef stew), check out:

http://bit.ly/1sM0Psg

*********
Stupid Fact of the Week:

Although not tourism related, we couldn't ignore sharing this silly
factoid presented in the Nikkei last week. DID YOU KNOW that each year
the amount of yoghurt sticking to the lids of small plastic yoghurt
containers sold in Japan, you know, the type where you have to lick
the underside because the best part is stuck there, is equivalent to
the entire amount of yoghurt consumed in Africa? :-)

*********
Lastly, wishing all readers a Merry Christmas and Happy New Year. Per
my usual calendar, I will be taking off the next two weeks as
holidays, and be back on board on January 10th with a regular Terrie's
Take containing next year's predictions.

...The information janitors/

***********************************************************
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