Malaysian halal sector gets boost from Tesco

Britain’s biggest supermarket, Tesco, will spend RM1 billion (€215m) on Malaysian-made halal food over the next five years to cater for rising demand in halal products in its home market.

Tesco Malaysia’s chief executive, James McCaan, told local media last week that the products would be introduced to around 40 Tesco stores, mostly in London, by April next year. About 1.7 million Muslims live in the targeted areas, he said.

The news comes shortly after Malaysia hosted the World Halal Forum in Kuala Lumpur, a conference designed to bring together companies involved in making halal food. Halal food must be handled and prepared following strict guidelines.

Malaysia is aiming to create a global halal hub that supplies Muslim consumers around the world. As one of the most developed Muslim nations, Malaysia has an edge over other countries in logistics, banking and halal certification.

Nordin Abdullah, executive director of Kasehdia, the media company behind the World Halal Forum, told in a recent interview that European markets represent significant growth opportunities for Malaysian halal food producers.

“There may be only 30 million Muslims in Europe but they have huge purchasing power in comparison with those in the Middle East or North Africa,” he said.

“In France, for example, the second and third generation Muslims are no longer happy eating what their parents bought in the local stores. They want pizzas and hotdogs that are certified halal,” he added.

And although a hotdog from Malaysia is highly unlikely to reach the European market, a halal hotdog is in demand from a growing niche market, he said.

The Halal food market has never been measured but estimates range from US$150 to 500 billion.

Tesco Malaysia is 70 per cent owned by the UK retailer and 30 per cent owned by Malaysian conglomerate Sime Darby. It has 10 outlets in the country.

The company says it exported Malaysian products worth RM223 million in 2003 and 2004. It has recently revealed plans to build a RM50 million distribution centre in Simpang Pulai, close to the Cameron Highlands where it sources vegetables.

Dominique Patton, 23-May-2006


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