Lord Bilimoria: UK should welcome people from overseas

The Indian-born peer is exasperated by official policy on foreigners studying and working in the UK

As a 19-year-old in India in 1981, Karan Bilimoria was unusual in wanting to study in the UK. Many of his contemporaries were headed for the US. He remembers them asking: “What are you doing going to Britain? It’s a loser of a country.” Family and friends told him that if he stayed on in the UK after qualifying as an accountant, he would never amount to anything. He was a foreigner — and Britain was riven with prejudice.

Did he amount to anything? The 53-year-old Lord Bilimoria of Chelsea — chancellor of the University of Birmingham, honorary fellow of Sidney Sussex College, Cambridge and founder of Cobra Beer, which supplies 97 per cent of the UK’s licensed Indian restaurants — thinks he probably did.

His friends were not wrong about the UK of the early 1980s. “The Britain I came to was the sick man of Europe. It was a country that had no respect in the world economy,” he says. And while he did not personally experience the prej­udice he had been warned about, when he trained as an accountant at what is now EY, there was only one Indian partner. “And they said it was because he had an English wife,” he says.

But in the years after he arrived as he was making his way from accountancy to a law degree at Cambridge university, the UK changed. The old barriers were swept away, and not just for Indian immigrants. “If you hadn’t gone to the right school and the right university, many career paths were limited,” he says. “I saw that all change in front of my eyes, and I put that down to Margaret Thatcher. I saw her transform this country into a country that economically was going places.”

For many years, he was a member of the Conservative party. At one time, he even thought of attempting to become a Conservative MP. But he resigned his membership some years ago. He sits in the House of Lords as an independent cross-bencher. He is a critic of the Conservatives’ policies on immigration and foreign students and is particularly fierce about Theresa May, the home secretary.

We are sitting in the meeting room of Cobra’s offices overlooking an autumn sun-dappled square in central London. Lord Bilimoria is in a smart dark suit, a paisley handkerchief peeking out of his jacket pocket, but the young staff bustling around are casually dressed. The place looks more like an advertising agency than a beer company headquarters.

What are they all doing? There is a tele­phone sales team selling beer to Indian restaurants. When the area managers meet up, they do it here. “We have the most authoritative database of all the Indian restaurants . . . which restaurants are opening and closing. So this is where all that happens.”

The company owes its start to something Lord Bilimoria did not like when he arrived in the UK: gassy beer. He started brewing Cobra as a more palat­able option in India. This year marks the 25th anniversary of the first bottle being imported into the UK.

He may have been a nervous immigrant to the UK, but his Zoroastrian Parsi family back home, while not wealthy, were distinguished military officers. His grandfather was one of the first Indians at Sandhurst. His father was a general. A cousin was chief of the Indian navy.

Where did the interest in beer come from? There were some family precedents: his maternal great-grandfather ran a liquor business near Hyderabad.

He relaxes as he tells the story. His accent is posh English, with the occasional Indian inflection. He swings a foot up to cross his legs, a flash of bright red sock matching his cuff links. It is easy to see his story as one of untrammelled success, but Cobra came close to collapsing three times.

The first was in 1998 when Tandoori Magazine, a trade title in which he had a 45 per cent stake, criticised service in Indian restaurants. Lord Bilimoria had no hand in the article, but the restaurants decided to boycott Cobra. It took a year to persuade them to buy his beer again. He had to cut staff numbers from 120 to 17. “We had to make awful, tough decisions just to survive.”

Lord Bilimoria is a big admirer of Mr Modi. “I think that he is a breath of fresh air in terms of the things he’s saying, the initiatives he’s started, whether it’s Clean India — huge, huge requirement there — whether it’s Make In India, encouraging manufacturing. He’s set a target for manufacturing. I think we need to do the same over here.”

He admires Mr Modi’s speaking skills too. “He’s a brilliant orator. If you hear Prime Minister Modi speak in Hindi, I would go so far as to say he’s one of the top four orators in the world today.”

Who are the other three? “Archbishop Desmond Tutu is absolutely superb. Bill Clinton is brilliant and Tony Blair at his best is fantastic.”

Ten years later, and growing fast, Cobra needed investment and agreed to Diageo, the drinks conglomerate, taking a substantial minority stake with a full sale five years later. The due diligence was done and Lord Bilimoria went on holiday, expecting to come back and sign the deal. While he was away, he got a call. “They said, ‘The deal’s off, we’ve got cold feet and we don’t want to go ahead’.”

Luckily, he had a Plan B, a bank loan. Days after the money arrived, Lehman Brothers went bust. His bank told him it would not have lent him the money if he had asked for it after that. “It was that close.”

As the financial crisis bit, a hedge fund investor in Cobra insisted he put the company up for sale. This was near-collapse number three. Lord Bilimoria calls it “the most painful process at the worst possible time”. Instead, Molson Coors, the North American beer company, which brews in the UK at Burton-on-Trent, agreed to a joint venture, which has given Cobra stability and, he says, profitability.

He devotes much of his energy to supporting foreign students. He finds it an infuriating task. Higher education is one of Britain’s great export industries — “except we don’t send goods out there; we bring students into the country” — and the Conservative government is making it harder for them.

He has just heard that six Indian students with places at Cranfield School of Management, where he also studied, have had their UK visa applications refused. “How ridiculous is that?” Students who come to the UK establish life-long links with the country, becoming its champions and supporters, he says.

He blames Ms May for her hostility both to foreign students and to valuable, legal immigrants. “She is on a rampage. I have said this and I will say it time and again: she is economically illiterate when it comes to immigration.”

Ms May, he says, tried to end foreign graduates’ already limited ability to stay on to work. “She goes and makes a statement before the [2015 UK] elections: I want every foreign student to leave the day they graduate. [Chancellor] George Osborne had to step in and say, we will not have that in the manifesto, we’re not going to do that. But this is how rabid she is.”

He is calmer about the House of Lords. It should be smaller, but it should not be elected, he says. “The more I have studied it the more I realised how lucky we are to have this institution. You’ve got world-class people there, world leaders in their fields and you’ve got that amazing input that scrutinises legislation, challenges government, debates.

“In an elected house you’d never get those people, they wouldn’t stand for election. You’d get people who were rejects from the House of Commons.”

PictoSo provides a platform for groups of people to share photos among themselves in a more private setting than Instagram or Facebook.  Moving away from the traditional broadcasting nature of social media, PictoSo aims to help people share the moments that matter with the people that matter.  The app works well at any occasion, from small gatherings among family and friends to huge parties and boasts a number of innovative features – pictures can be customised before sharing with filters, effects, stickers and more, and 10-second videos can also be shared in groups of your choosing by creating albums and inviting your friends from your phone contacts.

Lord Bilimoria spoke to Tom Knowles of The Times  to discuss the launch:

 It’s time to curry favour with the web’s chattering classes

The founder and chairman of Cobra Beer will unveil a surprise drive into the technology industry today when he launches a photo-sharing app designed to win market share from Instagram, Flickr and Snapchat.

Lord Bilimoria, who has spent 26 years in the drinks industry, has joined forces with his cousin Rashid Bilimoria, a Boston-based technology entrepreneur, to create PictoSo.

Having achieved success with Cobra, a less gassy lager that many diners enjoy with their Indian food, Lord Bilimoria is confident that his app will find a gap in the popular market for sharing photos on mobiles and online.

“To me, it’s like Cobra,” he said. “The whole idea of Cobra came out of doing something differently and changing the marketplace for ever. Beers had existed for thousands of years. I wasn’t inventing beer, I was just doing it differently. It’s the same with PictoSo — yes, there are lots of other photosharing apps, but this is a way of doing it in such a beautifully simple way that no one else is doing.”

As well as the benefits available on many photo-sharing apps, such as being able to upload pictures instantly, users of PictoSo will be able to create a private album that they can invite specific friends and family to join. Users who have been invited can then add their own photos to the album.

Over the past five years there has been a huge rise in online and mobile photo-sharing, with a trillion photos expected to be uploaded online over the next year. Instagram, the giant of photo-sharing apps, was bought by Facebook for $1 billion in 2012 and has 300 million users worldwide.

Where Service is No Small Beer

 

For many people, it’s probably difficult to remember a time when their local Indian restaurant didn’t sell Cobra, the smooth, much less fizzy lager that in just a blink of eye in beer terms (just twenty-five years), has become one of the must-drink brands with curry. But for its founder Karan (now Lord) Bilimoria, it’s precisely the memory of what was there before that ensures this very service-driven entrepreneur refuses to take any success for granted.

‘The origins of Cobra are well known now,’ says the son of the General Officer Commanding-In-Chief of the Central Indian Army, who first had the idea for a different sort of beer after studying at Cambridge University in the 1980s. He found what was on offer at curry house, too gassy and bloating. ‘The lager made eating unpleasant. I liked ales, but they were too far the other way – heavy and sweet,’ he recalls.

‘That’s when the idea for a less carbonated lager came about.’ The concept, he argues was resolutely his own dissatisfaction as a customer, and nine months later, in 1989, the first container-load from India arrived in the UK, with Bilimoria himself touting it to local restaurants on his push bike.

But while we can say ‘and the rest is history,’ the Cobra story is much more nuanced than this, and again, it’s service that has played a key part. ‘I was very confident that my own sense of taste was what customers would want, but the first batch was too sweet, too heavy and it wasn’t just me saying this,’ says Bilimoria. ‘Right from the start I was asking for feedback from customers and my first buyers, and it was because of this that I went through five iterations before I finally felt we’d got it right. The acid test was whether we got re-orders, and when 99% came back for more, we knew we had a good product on our hands.’

Even the name came from feedback. ‘Originally we called the beer Panther,” Bilimoria reveals, ‘But it just didn’t seem to resonate with people. Cobra was the second option, but it seemed to be what stuck with people.’

Clever tricks to make the beer stand out (including being sold in giant 660ml bottles,) all helped see Cobra achieve massive sales growth of around 40% per year between 1989-2008, but near collapse at the end of 2008 (after building up expansion debts it was unable to service) saw the business go into, and then out of liquidation, so that it could be re-bought by Bilimoria with American brewing giant, Molson Coors.

It was a period, he says, that reinforced in him already strong values that to succeed, the customers are who he is really working for. ‘The experience taught me a great deal, and it means that even today we don’t take success for granted,’ he says. ‘We still have sales teams permanently on the road, educating restaurants about our beers, our new products (like Cobra Premium, King Cobra, and Cobra Zero), and even how to ensure the consumer receives our product in perfect condition.’

A feature of selling via restaurants, is that the product (and therefore the service associated with it), has a middle-man, so even details like refrigerating Cobra at the right temperature (it has to be eight degrees- Celsius, says Bilimoria), matter. ‘Sometimes Cobra is stored with all the other soft drinks in a restaurant, which tend to be chilled much cooler,’ he says. ‘This means the taste of Cobra won’t be perfect. It’s these sorts of messages that we have to continually educate our sellers about, and even how to pour it correctly, so that it has the correct head.”

Today Bilimoria uses net promoter scores, which he says are ‘excellent for the sector’, to turn these service standards into measurable metrics. But for him though, this is simply an evolution in using feedback that dates back to when Cobra first launched. At that time Bilimoria personally manned stands at the BBC Good Food show to ask consumers how the beer tasted.

In fact it was his biggest so-called gamble – bringing brewing of the beer to the UK – that was based entirely doom-mongering protestations of the importers – who all said moving production to Britain would be a disaster.

‘At this point [1996] our Indian suppliers couldn’t keep up with demand, and all sorts of distribution delays and quality issues were stacking up,’ he remembers. ‘I had to do something, so I very deliberately slipped in new questions to our customers, which asked what was important to them – whether it was the smooth  taste, less gas, or where the beer came from. We jumbled the questions up so that we couldn’t be seen to influence the result, but every time we looked at the results, the place of manufacturer came last in importance.’ Bilimoria adds:

‘This was the very clear message I needed that customers didn’t rate location as a deal-breaker. Based on this, we switched. Consumers will give you the answer. There is logic there.  We were upfront about it, and looking back on it, if I hadn’t placed my faith in the customer, I wouldn’t be talking to you now.’

That ‘faith’, as he puts it, is why he says he has no problems reporting on service metrics, and why he thinks other businesses should have no issue with them either. “There’s not a single report we file with the Booker Group (the UK’s largest cash and carry operator, and of which he is a director,) that doesn’t carry our service metrics,’ he says.

In his other role as cross-bencher in the House of Lords, Lord Bilimoria believes a lot more ‘could and should be done by government,’ to really publicise how improving service and being open about  it can dramatically grow GDP. ‘This government is at least listening to business more,’ he concedes, ‘but more could be done to promote how all factors in customer service create a growing and healthy economy,” he says. ‘Service is a key part of growth, but I don’t think the government talks about it enough.’

But despite  supporting  customer  reporting,  a step Lord Bilimoria won’t take is enforcing,  or pushing companies to publicise forward-planning targets  for service – a criticism of service reporting  is that  it only has an eye on the past. ‘Those that run companies should always set themselves targets for service for continual improvement and growth purposes,’ he says.

‘Companies must always be somewhat discontented with their service, because that way they’ll never get complacent about it,’ he adds. ‘But I’m not sure they should be forced to publish their targets.  I’d much rather companies just be more talkative about service in general.

Bilimoria feels he’s been fortunate that government hasn’t, in his mind, pursued legislation that has forced service to take a back seat. ‘Today, whatever business we’re in, it’s a race; we have to always improve on what we do. The more time you spend with your customers, the better.’

Part of the job of his sales team is simply to meet buyers face-to-face, but also remind them about Cobra. ‘We realise that  running a restaurant is a tough  job, and that sometimes  managers don’t re-order because  they’re sorting out food deliveries, linen, cutlery, marketing, bookkeeping, and all the other things associated  with running a business,’ he says. ‘That’s why, if we notice they haven’t re-ordered, we’ll call them and sort it out for them.  Our job is to think about what our customers and their customers need, almost before they do.’

Perhaps what helps this is the fact that despite the more corporate Molson Coors ownership, Bilimoria is still very much the man behind the brand, and it’s his leadership that carries weight.  ‘I’m the founder, and it’s important I’m the champion for the brand still,’ he says, aware that he remains the personification of Cobra. A recent advertising campaign included a suave fictional ‘Meet the Boss’ – who some people have remarked as possibly being the younger Bilimoria. But personal credibility is even more important now, as Cobra is sold in supermarkets and pubs as well as from curry houses. ‘It’s the integrity and behaviour of the brand that really matters,’ he continues.  ‘We have our own charitable foundation too, that has given to more than 170 charities. Nowadays this is a part of what good business is all about.’

Today, the business couldn’t be healthier. Three months after the ‘Meet the Boss’ campaign first aired in 2014, off-trade  sales (supermarkets and off-licences) grew by 23%  and there was a 77%  growth  in bars too.

‘Nowadays, I’m always highly aware of good service, and I still think America has this almost as an art-form,’ says Bilimoria. ‘What I’m pleased about with us is that while we like metrics, we’re not slaves to them.  You can have all the metrics in the world, but I still don’t think it’s a substitute for going out there,  and talking to customers for real – as all our sales teams continue to do.’

It might well be 25 years since Bilimoria was manually taking customer feedback on stands at a food show, but clearly, the importance and significance of this process has not been diluted.

My Lords, the leading Cambridge historian, Dr Clare Jackson, says that politicians on both sides of the Scottish independence debate could learn from King James VI of Scotland, who also became King James I of England. He dedicated his life to creating a truly united kingdom that would see Scotland, England—including the Principality of Wales—and Ireland share more than just a crown. The main thing is that he engaged in a huge public relations exercise using emotive rhetoric, and he knew how to compromise. He made the first attempt at creating a new flag. Dr Jackson said:

“It shrinks the tendency to assume that everything happening now has never been thought of before”— a point made by the noble Lord, Lord Forsyth. She added:

“Now exactly 300 years after Queen Anne’s death, the 2014 referendum will decide if the settlement she made will last or if Scotland will once again become an independent country sharing a monarch with England, just as it did throughout the Stuart century”.

I thank the noble Lord, Lord Lang, for his excellent speech in leading this debate. We have heard all the arguments so far and we will continue to hear them. We have heard about Alex Salmond and his SNP’s wish list and the serious consequences. As the noble Lord, Lord Robertson, said, Scotland is tiny. It has 8.4% of the population of Britain and contributes 8.1% of the GDP. From the noble Lord, Lord Forsyth, we heard about the famous Scots in every field imaginable, not just today but historically, always doing brilliantly. Scotland has so much that we need and it has so many hidden gems. Wearing my Cobra Beer hat, Heriot-Watt University very kindly gave me an honorary doctorate. The university has the International Centre for Brewing and Distilling, one of the three finest in the world, and it must remain not just Scottish but British.

Alistair Darling clearly pointed out that Mark Carney, the Governor of the Bank of England, had said that,

“the failings of the Eurozone show that to have a successful monetary union you require fiscal and political union”.

I have said that time and time again. Mr Darling said that,

“the Governor’s judgement on currency unions is devastating for Alex Salmond’s currency plans. Why? Because the whole point of independence is to break the fiscal and political union that makes monetary union possible”.

Of course, Scotland has always had its own bank-notes—and long may they keep them.

Let us remind Alex Salmond about 2008. I have just returned from my annual week at the Harvard Business School. In March 2008, Alex Salmond made a speech at Harvard University and spoke about the “arc of prosperity” through Ireland, Iceland and Norway. He referred to,

“the lesson we draw from our neighbours in Ireland—the Celtic Tiger economy”.

He went on:

“With RBS and HBOS—two of the world’s biggest banks—Scotland has global leaders today, tomorrow and for the long-term”.

We are discovering the strength of that Scottish financial sector—but look at what London has done.

Let us keep this in perspective. In a currency union, Scotland has 10% of GDP and Britain has 90%. If it ever breaks up, we know who will call the shots. Losing the strength and security of the UK pound would have a profound impact on the Scots. The noble and learned Lord, Lord Wallace, as Advocate-General for Scotland, sent us a letter which clearly stated:

“The UK Government’s position is clear—Scotland benefits from being part of the UK, and the UK benefits from having Scotland within it”.

The letter gave a list of the “Top 20 Benefits of the UK”. He very clearly spelled out the Government’s stance on the matter.

One prediction following the assumption made by the House of Lords Select Committee on Economic Affairs was that it would result in Scotland accruing around 90% of oil revenues. Its report described this as the,

“economic bridge over which Scotland would pass to independence”,

and expected it to make up for all the loss of finances allocated by our Treasury under the Barnett formula. However, as has been said, the impact of prices in the oil market could just throw this, as could the length of time that oil will last. It would be a very unpredictable source of revenue.

Looking ahead, the university sector in Scotland is strong and we are proud of it. The Scottish Government are maintaining free access to higher education for Scots and people from the EU—except for people from England and Wales. In research funding, to this day, 15% of research for Scottish universities comes from UK charities. If Scotland breaks away, that will not last.

The Prime Minister has assured Mr Salmond that the reform of the Barnett formula, which gives Scots £1,364 per head more spending than the UK average, was “not on the horizon”. He did not say that it will never happen but Scotland has the assurance that that is not on the horizon. On 27 November 2013, YouGov published a poll which asked British citizens how they would vote—if they were able to—on whether Scotland should be an independent country. The response, by political party, was: Conservative, 65% no; Labour, 60% no; Liberal Democrat, 62% no; and even UKIP respondents voted 55% no. The response by gender was: males 57% no and females 54% no. It is overwhelming that the people of Britain, let alone the people of Scotland, do not want this.

Let us look back at history. Adam Smith, the great economic theorist and moral philosopher, never saw himself as Scottish. He was north British. Edinburgh, the Athens of the north, was a great centre of learning and at the heart of the Scottish Enlightenment. The wonderful Balmoral Hotel, where I have stayed, was known as the North British Hotel until the 1980s.

I will draw on my experience in India. The partition of India into India and Pakistan was a huge mistake. It did not last. My father fought for the liberation of Bangladesh. The united India of 1947—despite many attempts by parts of India to break away—has stayed united, and it is stronger united. Scotland today has the best of both worlds, being an independent country but being part of the United Kingdom.

Any Government will have many priorities, but the top four are: first, the security of citizens, both external and internal. If Scotland breaks away, we have heard that defence will go for a six. The second and third priorities are health and education, which the Scots have anyway. The fourth is the economy, and Scotland would be far weaker by being outside the UK.

The key issues are not just practical but the emotional. King James played on the emotional to get unity, and the noble Baroness, Lady Goldie, in her excellent maiden speech, said that she was equally proud to be both Scottish and British. My father’s regiment, the 5th Gurkhas shared battle honours with the Cameron and Gordon Highlanders. As a colonel, he made a pilgrimage to Inverness to visit the regiment because it meant so much. These are emotional identities.

In conclusion, my friend Amartya Sen, the Nobel laureate, speaks of identity. We have multiple identities. I am proud to be a Zoroastrian Parsi; I am proud to be an Asian in Britain; I am proud to be Indian; and I am really proud to be British. In the same way, I think that the Scottish are proud to be Scots and proud to be British. David Torrance published a book entitled The Battle for Britain: Scotland and the Independence Referendum. This is not about Scottish independence; this is a battle for Britain and a battle for the United Kingdom, which must stay united.

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