First let us know in Sugar Companies how alcohol is making.
Sugar companies typically produce alcohol from molasses, a byproduct of the sugar manufacturing process. During sugar extraction from sugarcane, the juice is processed to extract sugar, and the leftover molasses is rich in uncrystallized sugars. This molasses is used in alcoholic fermentation processes to produce ethanol or alcohol through the action of yeast under controlled conditions.
Key points:
1. Molasses is the primary byproduct used to make alcohol.
2. Alcohol production involves fermentation, where yeast converts sugars in molasses into ethanol and carbon dioxide.
This process is commonly employed in sugar companies with attached distilleries to diversify their product lines.
So now it is clear that alcohol is making by the byproducts of sugar manufacturing process. And its is their secondary business to ethanol or alcohol. their core business is to produce sugar which is of course Sharia Compliant.
Now come to elaborate it.
Point # 01: Most Sugar Companies Involved in Alcohol Business.
Answer: Yes, it is right most Sugar Companies Involved in Alcohol Business but its not these companies core business. Its these companies’ secondary business and in this case if the core business is halal and secondary business is Non Shari’a we applied the rules that the impermissible income from this non sharia secondary business must be less than 5% of total revenue of the company.
Point # 02: Why some companies are Sharia Compliant and some others are Non-Sharia Compliant let see the comparison here in these two sugar companies – EIDPARRY Vs AVADSUGAR
EIDPARRY – Parry (India) Limited:
it is a Sugar Manufacturing Company and its is Sharia Compliant. Why it is Sharia Compliant because its Impermissible income to total revenue is less than 5% as of 2024 Annual Report.
Vs
AVADSUGAR – Avad Sugar & Energy Limited:
it is also a Sugar Manufacturing Company and it is Non-Sharia Compliant. Why it is Non-Sharia Compliant because its Impermissible income to total revenue is more than 5% as of 2024 Annual Report.
Final Remarks:
Sugar companies’ core business is not to make alcohol instead their core business is to make sugar. And the reason for some sugar companies’ sharia compliant or Non-Sharia Compliant is not the business but the impermissible income to total revenue as mentioned above.
Note: Any companies to be Sharia Compliant there is other rules as well you can see in our App
IslamicStockScreener -India.
