Lord Karan Bilimoria is the founder and chairman of Cobra Beer. He developed the beverage in 1989 to complement Indian food and started importing to the UK in 1990. Today, Cobra has a retail sales turnover of £144m in the UK

September 13, 2013 6:20 pm

Lord Bilimoria: a heady brew of beer and politics

By Natalie Graham

Lord Karan Bilimoria is the founder and chairman of Cobra Beer. He developed the beverage in 1989 to complement Indian food and started importing to the UK in 1990. Today, Cobra has a retail sales turnover of £144m in the UK and has a global joint venture with Molson Coors, one of the world’s largest brewers. Born in Hyderabad, India, to a military family, Bilimoria gained a degree in commerce before qualifying in London as a chartered accountant. In 2006 he became Lord Bilimoria of Chelsea.Did you think you would get to where you are?

Starting a business appealed to me much more than becoming an investment banker or a barrister. My mission was to create the finest Indian beer and make it a global brand. I believed in myself, and today without doubt we have accomplished our first goal. In terms of the global beer brand we are making progress, but there is still a long way to go.

When you had made your first £1m did you want to slow down?

What is very clear in my mind is when the company was worth £1m. It was December 10, 1993, the day before our church wedding at St Mary’s, Bourne Street, behind London’s Sloane Square. As my wife is South African, we had six weddings in total, in India, South Africa and England. That day we got the news that the second loan from the government’s loan guarantee scheme, £190,000, had come through, and was contingent on us raising £50,000 in equity. We gave 5 per cent of Cobra shares to an angel investor for a £50,000 investment, and the value of the company was £1m. No way could we slow down. It was just the end of the beginning.

What is the secret of your success?

First, I do believe that success is a journey not a destination, and I have got so much more to achieve. I’ve been fortunate to have fabulous support from my wife, my family and my team, including my Indian restaurant sales director, Samson Sohail, who has been with me for 20 years. We would not be here without the backing of the Indian restaurant industry either.

Who has been your greatest influence?

My father, who has given me sound advice and leadership lessons. He retired as commander-in-chief of the Central Indian Army with 350,000 people under his command. He believed one should always go the extra mile, and integrate with the community you live in, but never to forget your roots. I am very proud of being a Zoroastrian Parsee.

On my mother’s side, I followed in the footsteps of my great grandfather, who was an entrepreneur, a philanthropist and a member of the Upper House in India, the equivalent of the House of Lords. I have adopted his motto, To Aspire and Achieve, on my coat of arms.

What has been the most challenging period of your career?

I nearly lost Cobra on three occasions. The last time was in 2009, when we were fortunate to rescue the business and restructure it through a very painful process, and form a joint venture with Molson Coors.

The second occasion was just before Lehman Brothers went bankrupt, which led to a strategic investment from the world’s largest drinks company being cancelled at the last minute. The first crisis was in 1998/99. There was a boycott against Cobra Beer, following an article written by the editor of Tandoori Magazine about service in Indian restaurants. I was a major shareholder in the magazine.

Have you been able to repay your creditors from 2009?

The figure at the time of reconstruction in May 2009 was £70m. I have said from that time that I would settle the creditors through the income streams of the joint venture with Molson Coors. I have already settled a large part of it. All the secured creditors have been settled, all the employees were settled, and all my shareholders I have taken with me into the joint venture. I am in the process of completing the settlement of the unsecured creditors and I will continue to do so. The reality is, the better the joint venture performs the quicker I will be able to settle this.

Do you want to carry on till you drop?

I would love to carry on for as long as my health permits. In the House of Lords I am privileged to work with my fellow peers, who are so active in their 80s, some even in their 90s. It is a great inspiration and they never stop. Retirement? Not at all, never.

Have you made any pension provision?

In my late 20s I took out a very small private pension. It was minimal provision, and I think I stopped contributing to it in my late 30s. The moment I began to build serious value in the business, when I was 32, I realised the business was going to be my pension. Given that I never want to retire, it is almost irrelevant!

What is your commitment to charity?

At Cobra we have been able to support good causes on a regular basis, virtually from day one. We have provided millions of pounds worth of Cobra Beer to fundraising events for hundreds of charities, from Macmillan Cancer and the Army Benevolent Fund to the Loomba Foundation for educating poor widows’ children, and Pratham, a charity that provides education for underprivileged children in India.

Do you believe in leaving everything to children?

Once you have educated your own children, I believe the most priceless thing is to be able to leave a legacy where the generations after you should never have to worry about affording the best possible education.

Do you allow yourself the odd indulgence?

I am keen on trying out different cuisines wherever I am in the world, from the variety of Indian restaurants in London to eating at Chinese restaurants in India, which sounds incongruous, but they are very good. The Golden Dragon at the Taj Mahal Hotel in Mumbai is one of my favourites.

There is another indulgence. On my first birthday as a new father I bought myself a special Rolex watch that is getting on for 17 years old now. I wear it all the time, even for scuba-diving.