In 2026, the APAC food & beverage industry faces a pivotal moment as regulations shape its future. Indonesia's halal mandate, a cornerstone regulation, is making waves, yet challenges persist for MSMEs. Meanwhile, salt governance reforms are driving regional reformulation efforts. Taxation dynamics in markets like Malaysia and India are reshaping industry landscapes. And the EUDR's delayed implementation raises questions about its impact. Additionally, FSANZ's shift in GM food definitions in ANZ is stirring controversy. These key regulations are set to redefine the sector's operations and consumer interactions in the year ahead.
Indonesia's Halal Mandate Challenges for MSMEs
Indonesia's halal mandate, requiring all products to be halal-certified, poses significant challenges for micro, small, and medium enterprises (MSMEs). Despite efforts to simplify the certification process through initiatives like the Halal Self-Declaration Programme (SIHALAL), many MSMEs still struggle with the complexity and cost associated with obtaining halal certification. The Indonesia Halal Products Assurance Agency (BPJPH) acknowledges the importance of MSMEs in the country's economy and has taken steps to support their transition into compliance. However, with millions of MSMEs yet to be certified and limited digital access hindering progress, achieving full coverage by the October 2026 enforcement date remains a formidable task.
The European Commission's experience with regulatory challenges can offer valuable insights for Indonesia as it navigates the complexities of implementing the halal mandate. By addressing the specific needs of MSMEs and exploring innovative solutions to streamline the certification process, Indonesia can enhance compliance rates among smaller businesses and drive economic growth in the halal industry. Companies like Unilever, with a strong commitment to ethical sourcing and sustainability, can play a pivotal role in supporting MSMEs through capacity-building initiatives and knowledge-sharing programs to facilitate their halal certification journey.
Regional Reformulation Driven by Salt Governance
The regional shift towards sodium and salt content governance is prompting significant reformulation efforts within the APAC food industry. Countries like Thailand and Singapore have implemented taxation policies and labelling systems to incentivize food manufacturers to reduce salt levels in their products. This regulatory push is not only influencing production practices but also shaping consumer behaviors towards healthier choices. Companies like ABV, operating in the food and beverage sector, are adapting to these regulatory changes by investing in salt reduction technologies and reformulating their product offerings to align with evolving consumer preferences for lower salt content.
The strategic response of food firms to reformulation requirements reflects a broader industry trend towards prioritizing health and wellness in product development. As more governments introduce regulations to curb excessive sodium consumption, manufacturers are under pressure to innovate and deliver healthier alternatives to consumers. Collaborative efforts between industry players, regulatory bodies, and public health agencies are essential to drive sustainable reformulation practices and promote a culture of health-conscious consumption across the region.
Taxation Dynamics and Industry Impact
Tax reforms in markets like Malaysia and India are reshaping the landscape of the food industry, with implications for both businesses and consumers. The increase in alcohol excise duty in Malaysia has raised concerns among beer companies like Carlsberg and Heineken, highlighting the potential threats to industry revenue and consumer safety. Conversely, India's GST reforms have been met with optimism by companies like Hindustan Unilever India Ltd (HUL), anticipating a positive impact on consumption trends and pricing strategies. These contrasting taxation dynamics underscore the importance of balancing fiscal policies to support industry growth while safeguarding consumer interests.
The experiences of companies like Carlsberg and HUL underscore the critical role of tax policies in influencing market dynamics and business operations. As governments adjust excise rates and GST structures, companies must adapt their pricing strategies and supply chain management to remain competitive and compliant. The strategic alignment of tax planning with corporate objectives is essential for companies to navigate the evolving regulatory landscape and capitalize on emerging opportunities for growth and innovation.
EUDR Implementation Challenges and Industry Preparedness
The European Union Deforestation Regulation (EUDR) has faced delays and revisions, raising questions about its impact on industry stakeholders and supply chains. The recent decision by the European Commission to postpone implementation until December 2026 has provided a temporary reprieve for operators, but uncertainties persist regarding compliance requirements and regulatory enforcement. The complexity of the EUDR and the need for a simplification review underscore the challenges of aligning regulatory frameworks with industry practices and environmental objectives.
The EUDR's delayed implementation presents an opportunity for companies to enhance their sustainability efforts and supply chain transparency in preparation for compliance. By engaging with regulatory authorities and industry associations, companies can proactively address deforestation risks and demonstrate their commitment to responsible sourcing practices. The experiences of multinational corporations operating in the EU market, such as Unilever, can serve as a benchmark for best practices in navigating complex regulatory landscapes and driving sustainable business strategies.
Conclusion
As the APAC food & beverage industry navigates a landscape shaped by pivotal regulations, the imperative for sustainability, ethical sourcing, and transparency in global supply chains becomes increasingly clear. From Indonesia's halal mandate to regional reformulation efforts and taxation dynamics in markets like Malaysia and India, businesses are challenged to adapt, innovate, and prioritize consumer well-being. The delayed implementation of the EUDR underscores the importance of proactive industry preparedness and collaboration to address environmental concerns. Unilever, ABV, and the European Commission exemplify the leadership needed to drive positive change and foster a culture of responsible business practices. Embracing these principles not only ensures compliance but also paves the way for long-term resilience and growth in a rapidly evolving sector.