Companies face higher costs as Halal certification moves online

By Singapore Business Review

The digital shift closes any room for fraudulent or ambiguous halal claims.

Singapore’s food, retail and hospitality sectors should brace for higher compliance costs and tighter documentation as the country’s halal certification system shifts fully online, intensifying scrutiny over how products are sourced, processed and handled.

Since 1 October, the Islamic Religious Council of Singapore has replaced physical halal certificates with digital versions featuring QR codes that allow instant verification of validity and approval type.

The move promises faster checks but raises the bar on traceability, said Sanjay Singh, an associate partner and senior vice president at Frost & Sullivan.

“Companies will need steady, year-round documentation across sourcing, preparation, and storage because everything is traceable,” he told Singapore Business Review via Zoom. Digitalisation also enables more frequent and unannounced inspections, he added.

The shift comes as the Asia-Pacific halal food market, valued at about $586 billion in 2024, is forecast to grow almost 12% annually to reach $1.26 trillion by 2031, according to Cognitive Market Research.

Rising consumer expectations add pressure: halal standards are essential for 17% of Singapore consumers and about 20% of Gen Y shoppers, said GlobalData Foodservice Practice head Anuran Dhar. “The digital shift closes any room for fraudulent or ambiguous halal claims,” he said in an emailed reply to questions.

But the transition also forces firms to strengthen internal controls, with Singh estimating potential efficiency gains of about 15% if systems and documentation are managed properly.

Data security and compatibility with Islamic council platforms are key risks, he said, adding that staff training would be critical as companies move away from paper-based processes.

Execution remains a concern. Dhar said digital certificates and QR codes should reliably link to accurate information, whilst secure portals are essential for maintaining trust among businesses and consumers. System outages or validation errors should be addressed quickly to avoid undermining confidence.

He added that the transition would work only if all parties keep pace. Certifiers need adequate resources, small businesses require onboarding support, and consumers need clear guidance.

“If any part of the chain falls behind, the whole system could feel more cumbersome than helpful,” Dhar said.

Differences in halal requirements across markets also add complexity for companies in regional supply chains, Singh said.

Indonesia, for example, accepts istihala—or chemical transformation—in certain cases, whilst other jurisdictions do not, requiring exporters to secure additional documentation.

Singapore and Indonesia signed an agreement in 2024 to ease some of these differences, with the council and Indonesia’s halal product assurance agency working toward smoother cross-border recognition of halal-certified products.

Digital halal certification may also expand beyond food into cosmetics, personal care and pharmaceuticals.

Singh said ethical considerations are driving broader demand, noting that 20% to 25% of non-Muslim consumers in the region increasingly prefer halal-certified goods.