How the multi-million dollar business of certifying halal meat imports was monopolized
 
 

In Egypt, all imported meat must be certified as “halal,” meaning that it has been procured, stored and shipped in accordance with Islamic law. Obtaining this certificate is a crucial requirement for meat suppliers to be able to access the lucrative Egyptian market.

The Egyptian government licenses a number of “certifiers” around the world whose job it is to ensure that exporting slaughterhouses are complying with halal requirements. And while the certification rules are numerous and complex, they are still tolerable, according to a US-based meat exporter, who said they hadn’t had a problem bringing their products into Egypt. 

Or at least that was the case until May 2019, when the Agriculture Ministry abruptly disqualified all halal certifiers eligible to operate in the United States, except for one newly licensed company: IS EG Halal Certified. Five months later, the ministry awarded the same company exclusive certification rights in South America as well, a major source of Egypt’s imported meat.

Brazil exported 171,000 metric tons of frozen beef to Egypt in 2018, making them the largest exporter of beef to Egypt, according to the Foreign Agricultural Service (FAS) office in Cairo, a division of the U.S. Department of Agriculture. The U.S. supplies the majority of Egypt’s beef liver and offal imports, with 62,200 metric tons in 2018.

IS EG remains an unknown entity for many in the market, including to both importers and exporters, as well as to foreign governments. A May report by FAS Cairo described it as a non-governmental company established in November 2017, with no prior experience in halal certification or pre-existing ties to the American beef industry. IS EG only started operations this past May, immediately after the Agriculture Ministry’s decision, the report said.

The company’s first order of business, days after it became the exclusive certifier, was to raise certification fees in North America, translating into millions of dollars of extra revenue, according to calculations made by Mada Masr. The FAS estimates that the price of American beef liver in the Egyptian market rose by about LE13 per kilo (81 cents) following the move.

An investigation by Mada Masr has revealed that IS EG operates alongside another private firm that is linked to a “sovereign entity,” a term used to refer to high-level security institutions in government. Together, the two companies have monopolized the multi-million dollar business of certifying imported beef in Egypt.

 

 

 

Certification firms provide Islam-compliant cattle slaughtering services to meat suppliers in exporting countries, according to statements by Yousef Shalaby, former head of the General Authority for Veterinary Services’s quarantine department.

A committee from the Agriculture Ministry periodically visits slaughterhouses abroad to ensure compliance with Egyptian standards and their registration with Egyptian embassies in exporting countries. These periodic audits can result in approval, rejection with a justification, or a recommendation with notes to revise certain practices pending approval, according to the Egyptian Organization for Standardization and Quality. 

Meat exporters in the US and South America have worked with dozens of certification firms across the region without trouble for decades. The decision to exclude all these firms for the sake of a single company with no prior experience came as a shock.

In May, the FAS said it received notification from the General Authority for Veterinary Services that the seven certifiers operating in the US had been suspended or rejected without explanation and that IS EG was the only eligible firm remaining. 

The same happened with certifiers in South America. The Agriculture Ministry has yet to provide any justification for why one company was made the sole halal certifier for South America, according to Sergio Remeles, representative of the Brazilian Beef Exporters Association.

Once it was made the sole halal certifier, IS EG immediately raised the fees for its services by an astronomical amount, according to Sherif Ashour, a meat importer who has dealt with the firm and imported several shipments through them. Certification fees for one container (27 metric tons) jumped from US$200 to over $5,000 in the US, and from $250 to $1,500 in South America.

The process by which a number of halal certifiers had their contracts cancelled appears to have been arbitrary and abrupt.

The manager of one of the disqualified certifiers, speaking to Mada Masr on condition of anonymity, said that his company received notification in early 2019 that it would be subject to a surprise audit. The move was unprecedented in the company’s 10 years of operations and was wholly unexpected given that no complaints had been filed against it, the manager said. Other certifiers were subject to a similar process, according to the FAS report.

Officials from different departments within the Agriculture Ministry visited the company in the United States for the audit, the manager said, and requested numerous documents concerning the company’s operations, including its dealings with countries other than Egypt. While the request was baseless, the company complied. The officials spent seven hours examining and photocopying documents before leaving the premises with little explanation. A few months later, the company was disqualified without justification.

Several other certifiers contacted by Mada Masr declined to comment on the issue in the hope that the government would reverse its decision. 

The Agriculture Ministry’s spokesperson, Mohamed El Kersh, declined to comment on the issue, referring Mada Masr to Ahmed Abdel Karim, the head of veterinary association’s quarantine division. Karim did not respond to questions posed by Mada Masr for this report.

Abdel Karim’s only comment on the issue came in October, when he told local press outlets that the rules and procedures for selecting certifiers are a domestic Egyptian issue. The veterinary quarantine department has a better understanding of the needs of the local market, he said, and no country had the right to object.

The government’s refusal to address the issue also extends to the rejected firms themselves. None were provided with an explanation for their abrupt disqualification, according to the company manager.

The company tried to contact IS EG itself, in hopes of understanding how they somehow complied with the alleged new regulations which were never made public. The manager said a secretary at IS EG promised to provide answers on the first call, but never responded again to follow up calls and messages.

 

 

 

IS EG was incorporated in New Jersey in 2017 and had never engaged in halal certification before 2019. (Its incorporation in 2017 coincided with a crisis in Brazilian beef exports, after several countries around the world banned imports from Brazil due to widespread allegations of corruption that led to a higher proportion of contaminated meat.)

Documents obtained by Mada Masr show that the company’s founders are Wael Hana, an Egyptian immigrant to the US, and Antranig Aslanian, an American attorney. Aslanian represented the Egyptian government in a 2016 lawsuit relating to the renovation of a diplomatic building in East Rutherford, New Jersey, which the government lost.

 

 

The IS EG website went online on April 22, just days before the government’s decision to grant it certification. It states that “IS EG is the only authorized agency by the government of Egypt to certify halal products for export from North & South America to Egypt and the Middle East,” though it contains little other information about the company.

 

 

The phone number listed on the site is registered to a trucking company called Loundes Express. Documents show that Loundes Express was founded by Wael Hanna in 2015. The company owns only one truck, yet its annual revenue is about $30 million. The company’s address is listed as 1047 Anderson Ave, Fort Lee, NJ, which is the same address listed for IS EG and Aslanian.

IS EG changed its legal counsel just weeks after it became the sole halal certifier, according to documents obtained by Mada Masr. Its new attorney is Howard M. Dorian, a lawyer with a lengthy disciplinary history who has been suspended several times. 

 

In May, Dorian helped another Egyptian import company focused on food products called Medi Trade establish a branch in New Jersey. Wael Hana is listed as the company’s director, and its address matches the address of IS EG, Loundes Express and Aslanian’s law office.

 


The publicly available information about Medi Trade is scant and it has no website despite its significant operations in the Egyptian market. Statements made by company officials, however, suggest that it is state-owned.

Medi Trade’s former chairperson, Major General Ahmed Refaat, said in a 2015 interview with Tahrir newspaper that it is actually comprised of a group of subsidiaries and was founded in 1979. The company specializes in supplying strategic foodstuffs, such as oil and sugar, to the Supply Ministry, he said.

Two importers who deal regularly with Medi Trade told Mada Masr on condition of anonymity that the company is linked to a “sovereign entity.” A third source said that this link is widely known among traders and importers.

The company was one of five organizations the presidency instructed to work towards reducing prices of food items in late 2015, a Medi Trade official told Tahrir newspaper. The other entities were the Armed Forces, El-Masryeen company and the ministries of Agriculture and Supply.

Medi Trade entered the spotlight again in November 2016 when the government exempted chicken imports from customs. Large chicken shipments to Egypt naturally followed, most of which belonged to Medi Trade, according to an official at Alexandria Port Authority.

According to sources, halal meat certificates are only handed out to importers in Egypt by Medi Trade.

Ashour, the meat importer, said IS EG made Medi Trade the sole distributor of the halal certification, creating a bottleneck in his business because he can’t release his shipments without IS EG contacting Medi Trade to hand him the certificate. Another major meat importer, who spoke to Mada Masr on condition of anonymity, confirmed this point, saying that Alexandria’s Chamber of Commerce informed importers that halal certificates would only be given out at Medi Trade’s Cairo office instead of being included with the rest of the shipment documents, as had been the case.

Medi Trade did not respond to requests for comment for this story.

 

 

 

Meat-exporting nations, including the United States, have denounced Egypt’s decision to license only one halal meat certifier. Brazil’s agriculture minister estimated that limiting certification to a single company could harm about 20 Brazilian slaughterhouses, according to comments she made to Al-Mal newspaper during a visit to Egypt in September to discuss the move.

Colombia and Paraguay also criticized the decision in October and officially announced they wouldn’t deal with the new company. Frigorifico Concepcion, one of Paraguay’s largest beef exporters, also sent an official complaint to their embassy in Cairo.

IS EG’s executive director Gamila Maali denied raising the price of certification and causing a spike in imported meat prices in Egypt, instead claiming that individuals had spread inaccurate news for personal gain, according to an interview with the Cairo-based Al Borsa newspaper in October. Maali said IS EG doesn’t charge for issuing certifications per se. Instead, it’s paid to offer services to importers, including wages to butchers and slaughterhouse supervisors, to ensure the imported meat is in compliance with Islamic laws. 

Maali added that costs differ from one shipment to another, depending on the number of butchers, supervisors and working hours in the slaughterhouse. 

IS EG employs about 150 supervisors and has contracted three companies in South America to provide 1,200 Muslim butchers, she said. The company aims to unify the process for issuing halal certificates across the world, she added.

Maali’s statements did little to pacify critics, however. 

The Egyptian Competition Authority has received numerous complaints against the government’s decision, an official in the watchdog agency told Mada Masr on condition of anonymity. Investigations into these complaints are secretly underway, the official said. 

In October, Parliament’s agricultural committee submitted a request for a briefing to investigate the reason behind granting such a “suspicious” company a monopoly over issuing halal certificates, Raef Temraz, the committee head, told Mada Masr.

Shereen Zaky, head of the food safety committee at the Egyptian Veterinary Syndicate, filed a report to the Prosecutor General in October that includes documents suggesting corruption surrounding the decision.

Zaky told Mada Masr the report includes the case of a halal certificate issued to a slaughterhouse in Uruguay dated July 28, months before the company started operations in South America in October, and even before it established its presence there in August.

 


IS EG’s monopoly means it can collect fees of over $11 million annually in North America and $10 million in South America, according to a calculation by Mada Masr that assumes meat prices and the level of imports remains unchanged this year compared to last year.

One meat importer said that the government doesn’t want halal certifiers to get all this profit. The state thinks this money “better serves the country,” he said.

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