View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
January 9, 2001

INDONESIA: International outrage over Ajinomoto’s use of pork enzyme in halal food escalates

As three Japanese and four Indonesian officials from PT Ajinomoto Indonesia were arrested by local police, the largest Islamic body in the country admitted that it knew months ago that pork enzymes were being used in the production of the widely used flavour enhancer, monosodium glutamate (MSG). The Indonesian Ulemas Council (MUI) uncovered the illegal use of bactosoytone when it began an audit of the company in September 2000.

As three Japanese and four Indonesian officials from PT Ajinomoto Indonesia were arrested by local police, the largest Islamic body in the country admitted that it knew months ago that pork enzymes were being used in the production of the widely used flavour enhancer, monosodium glutamate (MSG). The Indonesian Ulemas Council (MUI) uncovered the illegal use of bactosoytone when it began an audit of the company in September 2000.

Due to strict religious beliefs Muslims must only eat halal food, which is certified as free from pig product ingredients. Situated in the largest Muslim country in the world however, the head of MUI, the body that certifies halal food, K.H. Maruf Amin, said that “it did not want to scare the public until it got the facts right.”

Delay to reveal pork ingredients politically motivated?

Others believe the delay on the part of MUI was politically motivated, as it positions itself between President Abdurrahman Wahid’s struggling coalition government and the national assembly chairman Amein Rais, who is believed to be planning a coup before this coming August. Din Syamsuddin, MUI secretary general, maintains however that the three months taken to audit Ajinomoto was “nothing out of the ordinary.”

Revelations that the Indonesian subsidiary of Japan’s Ajinomoto Co continued to use pork enzymes during the audit period have led many to label the government weak and ineffective. Wahid is calling for the public not to overreact, however, and presidential spokesman Wimar Witoelar quoted Wahid in his defence of recent scientific tests that proved Ajinomoto products to be “halal.”

Recall initiated and factory sealed

Nevertheless, the health minister has given Ajinomoto three weeks to complete a recall of 3,000 tonnes of MSG products from Indonesian shelves, and the company’s factory and warehouses in East Java have been sealed.

Saleh Saaf, national police spokesman, revealed, “seven executives have been declared suspects, but they can be released when we finish the questioning.” Among those arrested for breaches in the consumer protection law were Ajinomoto Indonesia vice-president Yashushu Oda and president director Mitsuo Arakawa, who may face a five-year jail sentence.

Meanwhile Wijono Subagyo, lawyer for the company executives, commented that the planned investment of US$137m has been cancelled because “Ajinomoto thinks it is not profitable to continue after the withdrawal and the closure of the existing factories.”

A spokesman for Ajinomoto, which controls a third of the 1.5m tonnes MSG market worldwide, added: “It is not clear when we will be able to resume selling the MSG products in Indonesia.” It is also too early apparently to say how the incident will affect earnings.

TSE sees Ajinomoto stock value plummeting
 
In Tokyo, Ajinomoto’s stock has plummeted and some argue that the Japanese investor community in Indonesia will be shaken by the arrests. An official at the Japanese Embassy in Indonesia commented however: “There are no indications yet that the confidence of Japanese firms has been affected. Many of them see the Ajinomoto case as just being a special case with no bearing on the investment climate.”

Ajinomoto incident spreads to Malaysia

Hidenori Kawasaki, general manager of Kokusai Securities’ equities trading division, did go as far as to reveal: “The market is wondering whether this is an issue only in Indonesia or if it would spread to other nations.” And, with calls from an Islamic consumer group in Malaysia to test purportedly halal food despite repeated assurances that it is safe, it seems the panic has spread.

Nadzim Johan, executive secretary of the Muslim Consumers Association of Malaysia, explained: “We are in no position to assure the consumers that the products are safe. That is why we want the Domestic Trade and Consumer Affairs Ministry to carry out tests and make the findings public.”

“We are not against Ajinomoto using pig enzymes. But they must inform the public of its contents. The right to choose is with the consumers,” he added.

And in terms of informing the public, the reassuring words of Ajinomoto Malaysia last Friday are simply not enough to instil consumer confidence.

Read about the scandal as it erupted: click here.

Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

Related Companies

Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every other month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Food