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Student life taste for beers turned into Cobra
The founder Chairman India-UK Business Council Karan Bilimoria is the founder of famous Cobra Beer and chairman of Cobra Beer Partnership. The retail price of the fast selling Beer brand is 178 million pound sterling and is sold at over 6000 Indian restaurants. Exported to over 45 countries, Cobra went into partnership with Molson Course in 2009. In 2008 Cobra Beer won nineteen gold medals under World selection of quality awards and also lifted international high quality trophy. There is a long list of awards won by this internationally famed brand. Karan is also Chancellor of Thames Valley University. British government appointed him Chairman Indo-British Partnership in 2003. He is also Chairman Memorial’s gates committee, Chairman Advisory Board Pushpa Lamba Memorial Trust as well as member of many other charities. Non Resident Indians Institute awarded him with British Partnership award. In 2002 he received Asian of the Year and a number of other prestigious awards. He is a member of the House of Lords. Soft spoken and a man of wonderful personality, Lord Bilimoria talked to The Asians on UKIBC and Cobra Beer.
The Asians: You are President of UK-Indian Business Council. Why has it been founded and how does it work?
Lord Bilimoria: I was appointed as president of the Indo British Partnership Network in 1993 on the directives of then Prime Minister John Major in consultation with then Indian Prime Minister Nirsimha Rao and Finance Minister Dr. Manmohan Singh, now the Prime minister of India, to strengthen trade ties between the two countries. In 2007, UK Trade and Investment Board extended financial help and support in establishing UK India Business Council on the initiation of then Prime Minister Gordon Brown. Big names in British Industry are included in our advisory board. Our basic task is to explore opportunities to increase bilateral trade with India. Our members include young students and entrepreneurs in addition to corporate entities and companies. Our membership is very easy to get. We hold seminars and conferences from the platform. Our role is very important in introducing our system of working to Indian trade delegations. We provide complete information and guidance to delegations going to India. UKIBC had been very active in reaping maximum benefit out of Prime Minister David Cameron’s visit to India. Chairman UKIBC Patricia Hewitt also accompanied the prime minister in this visit.
The Asians: How much bilateral trade has increased since the establishment of UKIBC?
Lord Bilimoria: In 2003 when I started working with the council, the bilateral trade volume was £5 billion which by now has been risen to over £12 billion but I am not satisfied with this figure and want further increase. There is a vast market to exploit in both the countries for small industries and businesses. Modern communication system especially online media and internet have made business very smooth and easy that can help further increase in business with India. In 1993 there were only 19 direct flights between India and Britain in a week with only two airlines Air India and British Airways operating. But today there are 119 direct flights to India. What I want to tell to the business community is that India has become a very big market therefore one should also take this fact into account while exploring opportunities.
The Asians: What are the prospects of talks on free trade agreement between India and UK?
Lord Bilimoria: It would be nice to have such an agreement but it could only be possible through European Union. Long time has passed since Doha round and I am disappointed over slow implementation of whatever was agreed there. I would be more than happy if this agreement is reached as soon as possible.
The Asians: What are the business opportunities for Indian companies in Britain?
Lord Bilimoria: London is not only a beautiful city but it enjoys status of the financial gateway of Europe, thanks to its geographic location. It is considered as an economic stronghold despite current economic crunch. Many Indian companies are listed at London Stock Exchange and many more are expanding their business in this country, and it is hoped that their number would increase in coming days. Another change in trend is that the Indian students instead of going to US for studies are now opting for the UK.
The Asians: How do you see India as an emerging economic power?
Lord Bilimoria: India is an emerging global power beyond doubt as despite economic crisis in the West, Indian economy has recorded 6 to 7 per cent growth rate which is expected to rise to 8% this year and the further target is 10 percent to compete with China. Such a speedy growth rate is because of the demand in consumer goods as the middle class in that country has turned more prosperous over the years as their number has amplified to around 300m. The number of youth has also increased and intelligent and talented youngsters are coming up in businesses and education. India needs higher educational institutions and for this lucrative investment opportunities should be offered in this sector. They need a large number of universities and other educational institutions to cater for the needs of the growing population. Indian Institute of Technology and Indian Institute of Management are quite insufficient at the moment. It is hoped that they would allow foreign universities to open their campuses.
The Asians: You are a Chartered Accountant and Cambridge Law graduate. How did you turn to beer business?
Lord Bilimoria: It hit my mind during my student years. I had always loved Beer but I didn’t like British ale and lager. Being from Hyderabad I am fond of ‘Biryani’ and curry. I thought of making a wine that was as good and fresh as ale and lager and could be taken with all varieties of food especially Indian.
The Asians: Why did you name your brand as Cobra?
Lord Bilimoria: This is a very short and a known word and easy to pronounce and it immediately directs your mind towards India. Although this Beer is only 20 years old but because of its name it seems as of hundreds years old. Today Cobra Beer has become a household name.
The Asians: Did you experience any difficulty in translating your idea of introducing an Indian beer?
Lord Bilimoria: I would like to tell you that when I came here in the beginning of the eighties for higher education, my family members and friends asked me to return after education as they thought that I could not be much successful in my career. I would admit that they were right 30 years back but it is not like that now. I felt an invisible glass wall around the British society but a lot has been changed since then. There are open opportunities for all without any discrimination of colour, race and creed. Today Asians are in civil service, they are members of House of Lords and Commons. They are successful in different businesses. They move ahead in all departments of life. Despite being 5% of the population, their share in the annual GDP is over £103 billion. There are a lot of opportunities to work here.
The Asians: What is the difference between Cobra Beer and other brands and how many outlets you have in Britain and India?
Lord Bilimoria: The difference is in its taste. This is the number one Indian Beer of UK taste especially nice with food. As much as 90% of Indian restaurants sell Cobra Beer and we have 50% share of the market. Its sale is fast increasing. From 1990 to 2009, its sale shot up by 40 percent. Cobra Beer has become the most popular household brand. I had been fortunate enough to have a very hard working team that always come up with unique business ideas. Simon Suhail of Ethnic restaurant sector has been with me for the last 17 years and gave me good support. We have entered into partnership last year with the best wine manufacturing company Molson Course. Cobra Beer is on sale in 6 thousand Indian restaurants as well as supermarket outlets and Cash and Carry such as Booker, Bestway, and off license shops. We started manufacturing Cobra Beer for Indian market in 2005. Some of the Cobra Beer varieties are made here, some in Belgium and India and is being exported to over 40 countries.
The Asians: What difference do you feel in doing business in India and Britain?
Lord Bilimoria: Britain’s specialty is that it is the most open and free market of the world. Its financial market is also the best in the world. Here anyone can start Beer business without license whereas in India the open market business began only in 1991 after which a lot of changes have been witnessed in the market trend. But in my opinion much improvement has yet to come. Foreign lawyers cannot practice in India and the foreign Insurance companied can have only 26 per cent of the business shares. However, a bill is in the pipeline to make it 49 percent. Similarly Indian insurance companies cannot work in this country due to technical reasons. British retail stores such as Tesco and Sainsbury’s cannot work there. However, Booker cash and carry has opened one branch in India while retail sector has much room for foreign investments. There are still many barriers in entering in Indian market which are now gradually being removed. There are many hurdles in obtaining license for transportation of goods from one state to the other. The market in one state is controlled by officials and in the other by retailers and yet in another by someone else. It is felt that sending beer from one state to the other in India is more difficult than sending to some European country. Bureaucratic interference is very much visible in that country. It’s my dream to see India a free market like Britain.
The Asians: What impact the economic crisis has cast on your business?
Lord Bilimoria: The effect is too much. We have been a fast growing company and were obtaining loans to meet up with the growing market demand but the credit crunch that brewed two years back landed us in trouble. We had lost almost everything but then we entered into joint venture with Molson Course that encouraged us to move forward, and now we are in a position better than before.
The Asians: What is the key to success for a business in your opinion?
Lord Bilimoria: Vision and attitude are the key points in this regard but business idea, purpose and target are also equally important. I wanted to make the best Indian beer in the world and started business by borrowing £20000. At that time there were many big names in business but I went ahead with courage instead of losing heart.
The Asians: Who is your management guru?
Lord Bilimoria: I have been very fortunate that I got chance to work with several big and important business leaders. I have been impressed by personalities like Richard Branson, Ratan Tata and Narain Morthy and their way of working.
The Asians: What does Cobra Foundation work?
Lord Bilimoria: The Bilmoria Foundation was formed in 2005 to help in health, education and other sectors. It helps deserving children in Britain and elsewhere in the world. We contribute to charities such as Child in Need UK, Hope for Children UK, Help A London Children, Action Village India, PMG Polio Institute, Orthopedic Hospital India and construction of primary schools for handicapped children in Kalam Pong, India. Donations are also given for the help of victims of natural disasters as in December 2007 some £10000 were contributed for Bangladesh flood victims. Bedsides, 75 other welfare charities are given donations on different occasions.
The Asians: You have been a very active member of Pak-India Friendship Forum. How do you think peace and stability could be brought to south Asian region?
Lord Bilimoria: It is my earnest desire to see south Asia develops into a region like European Union with free border and increasing trade. Britain is doing its 60 percent business with European Union. India and Pakistan should also work to increase bilateral trade. Increase in trade and people to people contact can bring changes. We have the examples of Germany and France before us. No one could have thought 60 year back that they would sit together at one table.
The Asians: Tell us about your family? Had you been more successful in business in India?
Lord Bilimoria: For me both countries are my homes. Here I have my wife and children. I am the member of House of Lords. The way India is developing and its business is expanding one can predict that in 10 years Indian businesses would turn into the largest in the world. I have four children two boys and two girls. They always accompany while I visit India. I have a younger brother in India. My father had advised me not to forget about my roots no matter where I go for education or business.
The Asians: How do you manage time between business and family?
Lord Bilimoria: It’s challenging indeed but I have to go with all this. I give full time to my family and attend parents meeting in their schools and take part in their activities.
The Asians: What tip would you like to give new businessmen?
Lord Bilimoria: My father had advised me to work hard and with additional attention and move ahead with innovative and diversified ideas. This message I would like to share with others.