A year in, the ongoing conflict in Israel and Gaza has had a profound impact on brands and businesses in the UK and around the world, particularly those perceived to have connections or inclinations towards Israel or Palestine. 

This article explores these impacts and the rise of alternative beverage options in the UK market. 

Effects on brands and businesses: 
Several brands have faced calls for boycotts from activists and groups supporting Palestine. This includes companies seen as supporting Israel or operating in contested territories.

Importantly, these boycotts are not limited to Muslim consumers but include a diverse range of individuals who advocate for justice and oppose occupation. 

Brands that made statements or took stances related to the conflict have also faced significant backlash on social media. This has led to reputational challenges and forced companies to reassess their public communications strategies. 

To counter rising consumer wrath, some companies have altered their marketing strategies or public relations approaches. These changes aim to avoid alienating customers or to align with public sentiment. 

In terms of bottom lines, certain sectors, especially those linked to tourism or international business, have faced and may continue to experience financial repercussions. This is due to changing consumer behaviour and increased scrutiny of companies' geopolitical stances. 

Additionally, companies operating in or sourcing from the region may need to reassess their supply chains in light of the conflict. This could lead to changes in procurement strategies and potentially affect product availability or pricing. 

Rise of alternative beverages: 
In response to boycotts of major brands like Coca-Cola and Pepsi, several alternative beverage options have gained prominence in the UK and European markets. 

Some of the generic alternative soft drinks include Karma Drinks, known for its organic soft drinks and ethical sourcing; Pop Soda, which is said to focus on craft sodas with unique flavours and natural ingredients; Lixir Drinks, which specialises in low-calorie mixers and soft drinks; and Cawston Press, which offers sparkling fruit drinks made from pressed fruit with no artificial additives. 

Some emerging 'ethnic' cola brands have emerged to cater specifically to consumers looking for alternatives to major cola brands. These include: Mecca Cola, which was launched in France in 2002, and has since gained popularity in European Muslim communities.

Then there is Zamzam Cola, an Iranian brand that has found a market in some European countries. Others include Evoca Cola, a British brand that markets itself as an ethical alternative to mainstream colas; Qibla Cola, a UK-based brand that emphasises ethical consumption; and Yo Cola, a new British brand. 

These brands often market themselves as socially conscious alternatives, appealing to consumers who are looking to align purchasing decisions with their values. 

Broader implications: 
The emergence of these alternative brands reflects a growing trend of conscious consumerism. It demonstrates how geopolitical events can significantly influence market dynamics and consumer behaviour. 

The situation also highlights the increasing importance of brand values and ethical stances in consumer decision-making. It shows the potential for niche markets to grow rapidly in response to changing societal attitudes. 

The Israel-Gaza conflict has had far-reaching effects on the UK business landscape, particularly in the beverage industry. As consumers become more aware of the geopolitical implications of their purchasing decisions, brands are forced to navigate complex ethical territories.

The rise of alternative beverage options, especially in the cola market, illustrates the market's ability to adapt to these changing consumer preferences and values. 

Naved Syed is a UK-based halal food and beverage consultant

Palestine Drinks, an alternative soft drink brand to Pepsi and Coca-Cola, was founded by a Sweden-based Palestinian family. 

The drive to create the brand was the realization of how restaurants were dominated by Western beverages with no alternative in sight. 

Today, the brand has evolved not only as an substitute to dominant Western drinks but through its choice of nomenclature and design, symbolizes its deep connect with Palestine as well as remains keen to foster a message of community. 

We speak with Mohamed Kiswani, founder of Safadfood AB, the parent company of Palestine Drinks, on the brand's evolution, the broader cause and its growth moving forward. 

Palestine Drinks was established this February in response to the crisis in Palestine. How many product cans have you sold since then?
Kiswani: We have produced and sold more than 20 million cans since March this year.

How has the overall response been?
Kiswani: The response from the market have been a lot more than we could ever [have] imagined, from across all continents and countries in the world.

Are the products available in Europe and the UK? 
Kiswani: Our products are available in ten countries across Europe, with UK as one of our largest markets.

Did you face any challenges in partnering with wholesalers or placing your products on retail shelves? 
Kiswani: No problems at all; we have been partnering with wholesalers who have contacted us [and are] interested in being a part of this movement.

It's the cause that is the main purpose wholesalers wish to join us in the Palestine Drinks project.

Does the company plan to expand to the Middle East? If yes, when?
Kiswani: We have large plans for the MENA countries, of course, as we see it as our largest markets in the future. We are hoping we will launch before the end of this year and that we have reached all countries before Ramadan 2025.

How is the brand supporting the Palestinian cause?
Kiswani: The main message is to "Never stop talking about Palestine.." and that we believe in "Liberty for everyone".

All profits of Palestine Drinks sales are going to the Safad Foundation registered in Sweden as a charity organisation with a sole purpose of donating all funds every year to the civil society in Palestine for various water, food and healthcare projects in Gaza and the West Bank.

The foundation donates to already established organisations such as Childfund, Weworld, PCRF, Doctors without borders and their aid projects.

Blockchain can a gamechanger for the traceability of halal food products, but misconceptions swirling around the technology, limited case studies and lack of regulatory endorsement remain a major hurdle

Halal food products need to fulfill stringent certification requirements is stating the obvious. However, deploying evolving solutions such as distributed ledger technology (DLT) not only helps streamline the entire value chain but enhances transparency, too. 

Blockchain-based traceability streamlines processes and offers cost efficiencies. It also provides a much-needed layer of trust for Muslim consumers and importers. This is especially important considering that food fraud costs between $10 billion and $40 billion to the global industry each year, according to the US Food and Drug Administration. 

The halal food supply chain is not immune to fraud challenges - seven halal meat outlets in the Canadian city of Calgary were forced to close in April as federal police investigated unlawful livestock dealing and illegal slaughter operations.

It’s no surprise then that food traceability is proving to be one of blockchain’s most powerful applications. 

By providing a tamper-proof record of each movement within the supply chain, blockchain solutions can verify a product’s entire journey, from farm to fork. Such enhanced traceability can reduce the risk of halal certificate fraud whilst helping food manufacturers and retailers avoid expensive product recalls.

Promoting halal trade

One of the earliest examples of blockchain usage for halal food traceability came from Switzerland-Singapore-based OneAgrix in December 2022, when it demonstrated the journey of Hill Farm Finest beef from their farm in Bedfordshire, UK, all the way to the distributor Longino & Cardenal in the UAE, and later to the restaurant IL Borro in Dubai.

Since then, several tech firms have launched blockchain-powered solutions to strengthen halal food traceability. These include UK-based blockchain specialist iov42, which partnered with Cardiff-based Prime Certification in 2023 to create a data-sharing platform to address challenges around halal meat traceability.

The project - funded by the government of Wales through Blockchain Connected, a network for the blockchain community in Wales - contributed to the development of iov42’s traceability solution Interu. Launched in February 2024, the platform enables all traceability efforts, including certification, to be logged and shared with those who request to see due diligence. 

“Through this partnership, we've engaged in promising discussions with Welsh Government officials, whose goals are to explore and support substantial trade and investment opportunities between Welsh industries and the Middle East and North Africa region,” Anna Roberts, head of market development at iov42 told Salaam Gateway.

For Wales, red meat production is a cornerstone of agricultural output, with lamb alone accounting for £170 million in exports annually. Government data reveals a 301% surge in UK lamb exports to the Middle East between 2018 and 2019. Promising volumes have ensured solutions that bolster trust in traded goods become increasingly mainstream.

Moreover, iov42 and Prime Certification’s halal traceability project has sparked unexpected interest from the banking sector, according to Roberts.

“Institutions such as Thai Islamic Bank and Lloyds Bank have shown curiosity about how third-party verification (provided by Prime Certification) combined with our DLT platform could support high-volume halal product transactions in the Middle East, marking a new dimension of engagement beyond our original scope.”

Norway-based Unisot has also seen a positive response to its new blockchain supply-chain solution. The enterprise blockchain service provider launched HalalOnChain last October at GITEX Global Dubai to boost transparency across different halal sectors.

“We’re currently engaged in discussions with several partners and stakeholders across various segments of the halal food industry. These partners recognize the importance of building consumer trust by providing verifiable information about the halal status of their products,” Stephan Nilsson, CEO and co-founder of Unisot told Salaam Gateway.

“The openness to collaboration signals a growing awareness of the value that the public enterprise blockchain can bring in ensuring that halal standards are met consistently throughout the supply chain. These ongoing discussions are promising and could lead to more concrete partnerships in the near future.”

Slow uptake

While the halal food industry has shown interest in the potential of blockchain technology for product traceability, implementation remains in its early stages. 

“It is not as advanced as other supply chain industries – such as timber and coffee traceability - perhaps because halal traceability is more a consumer demand than it is business orientated, and you don't necessarily have the force of one or two big players in the market to create the change,” said Roberts.

Indeed, several factors are slowing down widespread adoption. One of the major hurdles is the misconception surrounding what blockchain technology truly entails.

According to Nilsson, several proof-of-concept (PoC) projects have been initiated in recent years to explore how blockchain can ensure traceability from farm to fork. However, a lot of these projects have used the term 'blockchain' loosely, and in some cases, the technology was disingenuous: not true blockchain, rather centralized systems marketed as such.

“Genuine blockchain adoption has been slower because many stakeholders have been misled by eager tech companies wanting to sell their own invented ‘blockchain’ technology and have faced challenges in complexity and costs,” said Nilsson.

He adds that many companies and stakeholders mistakenly equate centralized systems with blockchain, leading to failed PoCs that deliver underwhelming results. 

“This confusion is compounded by the misperception that blockchain solutions are overly complicated, underperforming, and expensive, which has caused hesitation among stakeholders in fully embracing the technology.”

These hurdles have led to a lack of scalability, data integrity, and true transparency, as well as unnecessary complexity and high costs for participating companies, he added. 

Accelerating adoption

Despite challenges, there are clear drivers for the adoption of blockchain across the halal food industry.

For example, credible producers who want to prove the authenticity and integrity of their halal products see blockchain as a valuable tool to establish greater trust with their consumers.

“Currently, those leading the way in adopting blockchain solutions for traceability tend to be the new generation of young, well-educated company leaders taking charge of their long-time family businesses - producers committed to offering verifiable quality products to their customers,” said Nilsson.

Additionally, consumers are becoming more conscious of the products they purchase, seeking greater assurance that the food they consume is genuinely halal, he says.

These two forces - producers eager to prove their claims and consumers demanding more transparency - are likely to fuel blockchain adoption in the future.

Other elements need to come into play, too, to encourage greater adoption of the technology. Education stands as the foremost task.

“Stakeholders across the halal food supply chain - from producers to certifiers to retailers - need a better understanding of how the public enterprise blockchain works, its benefits, and how it differs from centralized or pseudo-blockchain systems,” said Nilsson.

“Clarifying misconceptions surrounding blockchain will help more companies see the value in adopting solutions that can ensure transparency and trust throughout the supply chain.”

Roberts adds that resolving any misplaced fears around blockchain, mainly related to issues of privacy, would assure organizations how this technology could be used to support global trade whilst protecting commercially sensitive information.

Furthermore, successful case studies and demonstrations of blockchain’s effectiveness in other industries can also help alleviate concerns and showcase the potential for halal food traceability.  

“When stakeholders see clear examples of the public enterprise blockchain improving transparency and efficiency, reducing fraud, and enhancing consumer trust in similar contexts, they will be more likely to explore adoption,” said Nilsson.

The involvement of regulatory bodies and halal certification authorities is also essential, he added.

These institutions play a key role in ensuring the integrity of halal products, and if they endorse or require blockchain-based traceability systems, it could significantly accelerate adoption.

Regulations in other industries, often relating to the EU Green Deal, have already brought about a shift in approach to traceability, according to Roberts. In doing so, they have created the need for technologies like blockchain to help handle the volume of data as well as introduce accountability, transparency, and integrity.

The European Green Deal, approved in 2020, is a set of policy initiatives to transform the EU into a resource-efficient and competitive economy as well as help achieve its 2050 climate neutrality goal.

On balance, increased awareness, implementation and regulatory support will ensure increased adoption of blockchain for product traceability. This will receive a further impetus by rising consumer demand for verifiable halal products, coercing stakeholders to adopt innovative solutions to remain relevant. 

Many people believe that life insurance is haram because they assume it involves riba (interest), gharar (uncertainty), and maysir (gambling) -all of which are prohibited in Islam.

But before we rush to dismiss the concept entirely, let’s pause and ask a deeper question: Is there a way for Muslims to ensure their loved ones are cared for, even after they’ve passed away?

Dispelling misconceptions 
For many Muslims, life insurance feels like a Western product tainted by practices that clash with Islamic ethics. And to be fair, traditional life insurance - particularly in its commercial form - does raise some valid concerns. The involvement of interest-bearing investments and uncertainty about payouts makes most life insurance haram for Muslims.

But here’s the catch: life insurance, at its core, isn’t about gambling or exploiting people’s misfortunes. It’s about ensuring that, after you’re gone, your dependents are taken care of. The question isn’t whether the concept of life insurance is problematic - it’s how we can structure it so it adheres to Islamic principles.

Financial protection principle as old as Islam

Think life insurance is too modern to even become Shariah-compliant? Think again. Mutual financial protection is not new to Islam.

In fact, in early Muslim communities there were systems in place to help people manage financial burdens after an unexpected death. A key example is the Aqilah system, developed during the time of the Prophet Muhammad (peace be upon him). This system allowed tribe members to collectively contribute and pay diyyah (blood money) in cases of accidental death, thus protecting families from financial ruin.

The Aqilah system is rooted in solidarity and cooperation - values that are also central to the concept of life insurance. Much like the Aqilah system pooled resources for collective protection, life insurance, when structured ethically, aims to ensure financial security for families facing loss.

Islamic mandate to protect families

Islam places a strong emphasis on family protection, both financially and otherwise.

The Prophet Muhammad (peace be upon him) said, “It is better for you to leave your inheritors wealthy than to leave them poor, begging from others” (Sahih al-Bukhari).

This hadith underscores the obligation of Nafaqah, or providing for one’s dependents, even after death.

This goes to show that planning for the well-being of our families isn’t just a modern concern; it’s rooted in Islamic responsibility. Just as we prepare for the afterlife through good deeds, we are encouraged to plan for our families’ futures in this life. And life insurance, when structured to avoid riba and gharar, becomes a viable way to fulfill this obligation.

The heart of the issue often lies in misunderstanding what life insurance is designed to achieve. At its core, life insurance is about ta’awun, or mutual protection, a value that aligns perfectly with Islamic ethics. It’s not about profiting from death, nor is it about taking unnecessary risks. In fact, life insurance is a way of pooling resources to protect dependents, ensuring that they don’t fall into financial hardship in the event of a loved one’s passing. This communal approach mirrors the Aqilah system, where the goal was to share the burden and alleviate the strain on individuals or families in need.

Why Muslims must reconsider life insurance

The controversy surrounding life insurance within the Muslim community is largely tied to its association with Western financial systems. When structured correctly - according to Islamic values - life insurance allows Muslims to uphold their duties to their families even after they’re gone.

While traditional life insurance models do involve elements that are haram, the core idea behind it - providing for your loved ones in case of death - is deeply aligned with Islamic principles. By looking at historical precedents like the Aqilah system, we can reframe life insurance as an extension of mutual support and responsibility.

In a world where sudden loss can leave families financially vulnerable, it’s crucial for Muslims to think about how best to protect their loved ones. A Shariah-compliant approach to life insurance, built on ta’awun and maslahah, ensures we fulfill our obligations while also safeguarding the financial well-being of those we care about most.

Sharene Lee is chief operating officer and Ameerah Langer is brand & communications head at Takadao

The sukuk market could potentially face significant disruption next year with the uptake of a new Shariah standard, industry experts say. 

It could question the viability of sukuk as an asset class and raise questions for the broader landscape, too. 

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the Bahrain-based body responsible for setting Islamic finance standards, released the draft standard that seeks to redefine the concept of sukuk and its underlying structure. The draft aims to enhance the transparency, risk-profiling and Shariah-compliance of financial instruments.

The body had originally defined sukuk as 'securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets.'

In its present form, a sukuk transaction involves an issuer selling certificates to investors, with the proceeds used to purchase underlying assets.

The returns to investors are based on the performance of these assets or a predetermined rate. While maintaining Shariah compliance, sukuk share some similarities with conventional bonds but differ in their underlying structure. Nonetheless, the creditworthiness of the issuer remains a key factor in determining the risk and return profile of the sukuk.

AAOIFI published the exposure draft of the Shariah standard 62 in November 2023. It was released to gauge market feedback till the end of the first quarter. The review period was extended until July 31. 

However, the publication and effective date of the standard remains undisclosed. 

Industry stakeholders posit that the new standard, if implemented in its present form, could possibly convert sukuk into a complex and expensive financial instrument, dampening issuances as well as raising challenges for both existing issuers and investors.

AAOIFI Shariah standards are adopted as mandatory regulatory requirements in many countries and jurisdictions across the globe such as Bahrain, Jordan, Krygyzstan, Mauritius, Nigeria, Qatar and Qatar International Financial Centre (QIFC), Oman, Pakistan, Sudan, Syria, the UAE and Yemen. However, the level of enforcement varies from market to market.

The UAE, which is a key sukuk and Islamic finance market, could prove to be a litmus test. It is expected that the UAE Central Bank, which adopts AAOIFI Sharia standards via its Higher Sharia Authority, will implement and enforce the new directive on all nation-wide Islamic banks and relevant entities engaged in Islamic finance activities by mid-2025. 

Shariah-alignment
The new standard calls for several provisions, including genuine ownership of the underlying assets. It stipulates that sukuk ownership should be clearly defined, legally enforceable and must reflect a genuine transfer of possession. 

Furthermore, the risk and return of sukuk must be directly tied to the performance of the underlying asset and must not rely solely on the credit worthiness of the issuer. The standard also prohibits a guaranteed payment mechanism to ensure that sukuk does not replicate the functionalities of a conventional bond.

Practitioners argue that whilst the new benchmark inches the sukuk closer to the true Shariah principles, it will make the issuance and investment process of the instrument expensive and complexed. 

An S&P Global report issued in July predicts that adopting the guidelines as they have been presented could disrupt the market and result in further market fragmentation, dampen issuer and investor appetite and delay issuance until sukuk structurers figure out a middle ground. It could reduce issuance volumes over the medium term if it materially alters the nature and risk characteristics of sukuk instruments. 

If the standard is approved later this year, the adaptation will likely begin next year.

“This will not affect 2024 issuance but will likely be a consideration from next year. The standard will transition the industry toward asset-backed sukuk by requiring the real transfer of underlying assets to investors,” the agency added. 

Rizwan Kanji, partner at law firm Akin Gump in Dubai cautious that Standard 62 would mark a significant paradigm shift. 

“It [Standard 62] would entirely alter the risk profile of sukuk exposing the investors to the performance risk of the underlying assets,” he says. 

“The change in the risk profile would likely dampen primary issuance as well as the appetite for sukuk from investors. Approximately 90% of global sukuk issuances are asset based (i.e. corporate risk) and the market and investor community has not yet evolved to adopt an asset backed instrument. Any such developments may take time.”

Total sukuk issuance reached $91.9 billion over the first six months of 2024, which is on a par with last year but marks an upward trend in foreign currency-denominated issuances, according to the S&P report.

Altering the credit and risk profile of sukuk from an asset-based fixed income instrument - which currently shares several traits with a conventional bond - to a complex securitised instrument will lead to its own set of challenges including tax, accounting and legal considerations.

Khalid Howladar, managing partner of credit & sukuk advisory at Acreditus, says that sincere ‘asset-backed’ instruments are securitisations - which are a very different asset class to unsecured debt/sukuk. 

“They are more complex and expensive from a structuring perspective but easier from a Shariah standpoint given that the asset now has a very clear economic role in the sukuk performance,” adds Howladar.

Abdul Kadir Hussein, head of fixed income asset management at Dubai-based Arqaam Capital, points to three potential challenges for investors. 

“The cost to issuers will be a challenge. The transfer of assets may attract duties and fees. Secondly, the enforceability is tough for foreigners to own assets in some of these countries that issue sukuk. Thirdly, borrowers will most likely feel they are off the hook in that they have contributed the assets to cover the borrowing. If asset values decline, they will say it’s not our problem.”

Bashar Al Natoor, Islamic finance head at Fitch Ratings, adds that there are still some unanswered questions, like the specific details of the final standard, its level of implementation and the overall enforcement.

However, a UAE-based banker, who requested anonymity, believes that from a religious perspective, it is the right direction to pursue. “From a Shariah perspective, this what sukuk should be. We were structuring a lot of these kind of sukuk and financing solutions, but we were light on Shariah.” 

“Now these are going to be very solid Shariah-compliant structures. Much like in ESG, you have light green or dark green [denoting the level of sustainability] - the similar will apply here. However, that doesn’t mean the market is going to like it or move pass it,” the banker adds. 

The road ahead

A consortium of entities, comprising UAE banks, both Islamic and conventional, international lenders as well as law firms wrote a letter to AAOIFI last month, documenting their specific concerns regarding the new benchmark. The letter highlights challenges for issuers and investors as well as potential risks for the market if the standard is implemented in its current form. 

Nonetheless, Fitch’s Al Natoor, says that the Islamic finance market has previously demonstrated the capability to adapt to changes, as this is not the first time sukuk has experienced challenges. 

“We have to wait and see what the final standard contains and how it is enforced, before jumping to conclusions,” he notes.

“Historically, the market has adapted to shocks like AAOIFI's Taqi Usmani 2008 statement criticising the sukuk market, Dana Gas in 2017, and AAOIFI Standard 59 in 2021, to name a few.”

Islamic finance is built on a foundation that contrasts sharply with conventional financial systems.

Unlike the global financial system, which is deeply rooted in interest-based principles that often lead to inflationary pressures, Islamic finance is driven by the principles of wealth preservation and equitable growth through investments that share both risk and reward. By rejecting riba (interest), Islamic finance presents an alternative that could address the pressing social justice issues of our time, particularly the widening financial inequality.

At the heart of Islamic finance is a set of prohibitions, derived from Shariah law, that dictate what is impermissible.

These include the prohibition of Riba (interest), Gharar (uncertainty), and Maisir (gambling).These principles not only guide Islamic banking but also extend to Islamic insurance, or Takaful.

Understanding the Prohibitions

1. Riba (interest):
Riba, or interest, is the most well-known prohibition in Islamic finance. It refers to any guaranteed interest on loaned money, regardless of the form it takes - whether monetary or otherwise.

Conventional insurance companies typically invest customer premiums in interest-bearing financial instruments, thus violating the prohibition against riba.

Moreover, the very structure of conventional insurance can be seen as involving riba, while scholars highlight the insurance contract itself as including riba since a small sum of money (premiums) is exchanged for a large sum of money (claims payment). The excess amount of the claim payment over the premium is considered a form of riba. 

2. Gharar (uncertainty):
Gharar refers to excessive uncertainty in commercial contracts, where the outcomes are ambiguous or unclear. 

Conventional insurance often involves a significant degree of gharar because the benefits to the insured are not always well-defined. For example, in auto insurance, the payout depends on various factors, such as the extent of damage and the insurance company’s assessment, leading to uncertainty about what the insured will receive.

3. Maisir (gambling):
Conventional insurance can also be viewed as a form of gambling.

In a typical insurance contract, the insured pays premiums with the hope that they will receive a payout in the event of a claim. If no claim is made, the insurance company keeps the premiums, and the insured receives nothing.

This creates a zero-sum situation where either the insured or the insurer benefits at the other's expense, aligning the contract with the principles of gambling, which is strictly prohibited in Islam.

Why conventional insurance is not Shariah-compliant

Given these prohibitions, it is clear why conventional insurance is considered haram (forbidden) in Islam. The practice of conventional insurance violates the core principles of Islamic finance, leading many Muslims to believe that all forms of insurance are impermissible. However, this is a misconception.

Prophet Muhammad (PBUH) himself endorsed the concept of preparedness against known risks. This approach was further exemplified by the practice of Aqilah, where members of a tribe would contribute to a communal fund to support each other in times of need.

Thus, the prohibition is not against the concept of insurance per se, but rather against the way it is practiced in conventional systems, which incorporate elements of riba, gharar, and maisir.

The emergence of Takaful

In response to the challenges posed by conventional insurance, Islamic scholars have developed Takaful, a cooperative form of insurance that aligns with Shariah principles.

Takaful is rooted in the idea of mutual assistance, where participants contribute to a common pool to support each other in times of need. This model eliminates the issues of riba, gharar, and maisir by ensuring that the interests of all participants are aligned, and any surplus is redistributed among the members.

The potential for Takaful is enormous, not just within the Muslim world but globally, as it offers an ethical alternative to conventional insurance.

With the advent of blockchain technology, cryptocurrencies, and decentralized autonomous organizations (DAOs), there is now an unprecedented opportunity to create a truly transparent and cooperative insurance system based on Takaful principles. For example, blockchain technology presents a vital opportunity to advance Takaful by enhancing transparency and security, aligning perfectly with Shariah principles.

Its decentralized ledger reduces fraud through real-time, verifiable claim management and automation, cutting down on manual processes and administrative costs while improving efficiency (Khir & Said, 2020; Ibrahim et al., 2022).

Sharene Lee is the chief operating officer at Takadao
 

Muslims around the world form a growing cohort of travellers, making up for a considerable portion of the global traveller base. 

Key factors such as rising wealth and disposable income, and a spirited Gen Z tourist base is propelling Muslim travel, prompting airlines to court this promising passenger segment. This includes respecting their religious obligations. 

Muslim-majority countries

Travellers, for the most part, assume that on-board Muslim meals served by airlines operating out of Muslim-majority countries would be halal.

But the key question remains: Are they halal-certified? 

Dubai-based Emirates says on its website that all of its meals are ‘halal-certified’. Etihad Airways, headquartered in the neighbouring emirate of Abu Dhabi, says all food served on board is prepared ‘in strict compliance with halal regulations and is suitable for Muslims’. In Qatar, the national carrier also states that all meals are ‘halal’. 

“Flight meals that are prepared in compliance with halal guidelines are not necessarily halal-certified. They may or may not have the requisite certifications. However, various [regional] airlines do offer meals that are halal certified, like Emirates, Etihad Airways, Qatar Airways, Saudia and Oman Air," Zeeshan Abdul Aziz, CEO of International Halal Certification told Salaam Gateway. 

Bahrain’s Gulf Air offered an assurance on its website, stating that there remains no need to request for a Muslim meal as all food served on airline-operated flights is ‘halal’. 

Halal certification is the process through which an independent entity supervises and verifies a product, attesting that it was produced in conformity with Islamic laws. The certification is typically granted by Islamic certification bodies or organizations that have the expertise to assess and confirm the halal conformity of products. 

Outside of the GCC region, Malaysia Airlines, one of Asia’s largest carriers, notes that all meals served on board are halal-certified and prepared in strict compliance to halal requirements. 

“However, if you are a Muslim passenger flying with one of our codeshare partners, you are advised to request for Muslim meals,” the airline states on its website. 

Turkish Airlines states that there is no need to create a demand for Muslim food because the meals served on its flights are prepared according to Islamic methods.

“Several airlines claim that they prepare products in compliance with halal regulations, though they are not halal-certified. Like Turkish Airlines ensures it does not handle pork in the same facility,” said Abdul Aziz. 

Non-Muslim countries 

Singapore Airlines’ Muslim meal served on board its flights is prepared without the use of pork, lard or alcohol, and the ingredients used are sourced from halal-certified suppliers, a Singapore Airlines spokesperson told Salaam Gateway. 

“The meals are not halal-certified as the serviceware used are not separated for various types of meals available on board,” the spokesperson added. 

Hong-Kong headquartered Cathay Pacific states that its Muslim meal contains no pork and pig by-products, gelatine, non-halal fish from species without scales or fins, alcohol and flavouring extracts with alcohol. 

However, ‘all meals on flights to and from Bangladesh, Indonesia, Malaysia and [the] Middle East are prepared according to the halal method’, the airline said on its website. 

Moving towards Europe, all meat and poultry products used in the preparation of a Muslim meal on Lufthansa-operated flights are certified as slaughtered according to halal guidelines. No pork or game is used, as well as no alcohol. 

UK’s flag carrier British Airways states that its halal meal is prepared in accordance with halal guidelines.

“It uses halal meat and does not contain pork, alcohol or derivatives of these products,” it said. But the airline offers no information on whether the meals are halal-certified or not. 

But why is certification so important? One of the major advantages is that a growing number of Muslims travellers who are looking for halal-certified meals on flights feel more satisfied when they are served such food, explained Abdul Aziz.  

Monique Naval, senior research analyst at Euromonitor International added that people are more conscious than ever about where their food comes from, and Muslim consumers are no exception. 

“Islamic beliefs dictate Muslims’ dining preferences, and they are ethically conscious regarding halal accreditation; halal certification provides assurance that they adhere to Islamic laws. As such, offering halal-certified food on flights allows airlines to build rapport among Muslim travellers and boost consumer confidence,” she said. 

In the ascendant
Muslims form a sizeable chunk of the global traveller base, with Muslim international arrivals expected to reach between 164 to 168 million this year, exceeding pre-pandemic levels by as much as 3-5%, the Mastercard-CrescentRating Global Muslim Travel Index 2024 stated. 

“This growth trend is expected to continue, with projections showing that Muslim international arrivals could reach 230 million by 2028, accompanied by an estimated expenditure of $225 billion,” the report suggested. 

The projections illustrate the segment’s rising prominence, propelled by technological advancements, economic growth and tourism development. 

"Halal remains under the spotlight as companies, including airlines, race to benefit from a pool of untapped consumers. Halal labelling provides assurance and a display of dedication to consumers,” said Naval. 

For all the benefits surrounding halal certification, there are several issues impeding the process. 

"Airlines prepare different types of meals depending on the regions they serve, hence there are hundreds of ingredients that are used. This makes the certification process more complex and detailed. Airlines have to source ingredients from different suppliers from all over the world, so to ensure the halal supply chain of each raw material is a big challenge," said Abdul Aziz. 

Indonesia is five months away from welcoming defence minister - Prabowo Subianto - as its next president.

President-elect Subianto will succeed incumbent Joko Widodo in October. 

From an Islamic economy standpoint, how will the baton of the Sharia economic & finance national agenda be handed over to the next government?

The transition has, so far, been managed smoothly between the current and upcoming government, says Sutan Emir Hidayat, Sharia ecosystem infrastructure director at the National Sharia Economy and Finance Committee or KNEKS.  

Gauging from the communication conducted with the upcoming president’s Shariah economy teams, there is clear intent to strengthen KNEKS to become an independent entity. 

KNEKS operates under the ministry of finance. 

“They have shown strong commitment to continue what we have achieved. There were discussions regarding KNEKS and its transformation into an independent body, its pros and cons,” Hidayat told Salaam Gateway.

At the moment, KNEKS consist of 16 members, including three coordinating ministries; eight ministries – finance, religious affairs, industry, trade, cooperative & SME, state-owned enterprises (SOE), tourism & creative economy, national development plan - and three institutions as well as the Indonesian chamber of commerce and the Indonesia Ulema Council (MUI). 

KNEKS has regional representative offices in almost all provinces across Indonesia except nine, including Papua Island, Bali Island, Nusa Tenggara Timur and Maluku, where majority of its residents are non-Muslims. 

Hidayat added that the Sharia economy and finance agenda is already a part of the National Long Term Development Plan (RPJPN) 2025-2045 and its derivative - the five-year medium term development plan (RJPMN) 2025-2029.

The medium development plan outlines more detailed performance indicators about the Sharia economy masterplan (MEKSI). 

“We are currently completing the MEKSI document and have welcomed governors from regions to explicitly include Sharia economy and finance agenda in their regional development plans with sustainability and continuity. We have asked provinces such as West Kalimantan, Riau, Gorontalo and they have shown enthusiasm so far,” says Hidayat.

The new Sharia economy masterplan, according to Hidayat, is a refinement of MEKSI 2019-2024 and has 13 priority programs. 

“We have worked on these priority programs, but they are very basic and still have gaps. To be more comprehensive, they must be developed further. The new MEKSI will be in line with the five-year medium development plan that is being drafted and it will be used to support the vision of Indonesia’s 2045 social economic transformation,” he emphasises.

The Sharia economy and finance agenda is also included in the 2025 state budget which specifically outlines performance indicators for ministries and institutions that are KNEKS members.

Hidayat hopes the new government, consisting of Subianto and vice-president Gibran Rakabuming Raka, finds new sources of growth. 

Meanwhile, Rezza Artha, a team member of the upcoming government, says the new vice president himself is strongly committed to advancing the Islamic economy through several policies such as training and upskilling professionals in the Islamic banking sector, improving the quality of halal tourism, and the overall halal industry in Indonesia.

During the electoral campaign, the president and vice president issued a vision and mission document, which outlined how the new government will use the Islamic economy as an engine of growth, encouraging Indonesia to become a center of the global halal economy through strengthening its Islamic financial institutions, expanding the ecosystem, education and research, as well as optimizing the utilization of social funds (zakat, sadaqah, waqf, etc.).

“The document also stated that they will establish a Waqf Bank as an economic driver based on the Sharia economy on the basis of academic, thorough study, and comprehensive feasibility tests as well as the preparation of laws and regulations related to the Waqf Bank,” says Artha.

Other initiatives include strengthening state-owned enterprises and the private sector that conduct businesses or offer services across the Islamic economy.

“Prabowo-Gibran clearly stated in their Asta Cita (vision and mission document) that the Islamic economy is a sector they will develop if they received the mandate to run the government in the future,” he adds.

Key challenges
Hidayat admits that not all of the 13 priority programs of the Sharia masterplan ran smoothly during the last five years, the delay of the mandatory halal certifications being one. 

Last month, the country’s coordinating minister for economic affairs, Airlangga Hartarto, announced that the government has postponed the mandatory halal certification of products until 2026, particularly for micro and small enterprises. Micro enterprises are companies whose annual sales are in the range of around $62,586 to $125,295. Sales of small enterprises reach approximately $939,718 per year.

The policy has been postponed for food and beverage products as well as those in the traditional, herbal, and other medicines. The mandate also applies on cosmetics and chemical products, accessories, household goods, and medical device categories.

The original October 2024 deadline for the certification policy will continue to be applicable on medium and large enterprises. 

"We had aimed that by 2024 there would be 10 million halal-certified MSME products, but only 4.4 million have secured certifications so far. On that basis and perhaps due to lack of education and awareness, we require a big budget since the Halal Product Assurance Agency (BPJPH) and KNEKS alone are not enough for a country as big as Indonesia. That’s why the regulation was postponed for two years. I know we have a risk of reputation following this setback. But it is in the best interest of MSMEs,” says Hidayat. 

LPPOM director Muti Arintawati said many stakeholders will feel a sense of relief. Recognizing the vast number of businesses and the limited time until October this year, she acknowledged the challenges MSMEs would face in meeting the deadline. 

However, she cautions that this extension should not encourage complacency. Intermediate programs and strict targets must be established to ensure businesses do not delay the certification. 

“The attention should not be solely on the business scale within the MSME sector. The focus should be put on businesses supplying critical materials used in other industries, regardless of whether they are MSMEs or not. This is because the supply of food and beverage-related materials and services involves both large/medium and small/micro businesses," said Arintawati.

For example, meat availability from animal/poultry slaughterhouses is crucial, as meat and its derivatives are used in various culinary products. Extension of such MSMEs in the halal supply chain would hamper the availability of halal meat, hindering halal certification of businesses using meat. Several MSMEs offer repackaged products for spices and baking ingredients as well as operate services related to food and beverage.

Therefore, LPPOM urges the government to focus on solving halal issues in the upstream sector first. 

"Ensuring the availability of halal materials and services will make it easier for MSMEs to produce halal food and beverage end products. It's like a domino effect. If upstream issues are resolved, most halal product issues in Indonesia will also be resolved. The halal certification process will be easier, and the halal guarantee can be more accountable," said Arintawati.