Lord Bilimoria on why the CBI still matters and what business wants from politics

The Cobra Beer founder and cross-bench life peer says the best way to fend off a recession is through growth

230704 Lord Bilimoria Cobra

Unsurprisingly, Lord Karan Bilimoria’s favourite beer is the one he invented. In 1989, after studying law at the University of Cambridge, the now cross-bench life peer created Cobra with his business partner Arjun Reddy in a west London flat. The elevator pitch, Bilimoria recalls, was to make a beer that had all the refreshing qualities of a lager and the smooth texture of an ale.

“Cobra is an intricate recipe made up of malted barley, rice, wheat, maize and three varieties of Bavarian hops,” he says with an evangelical enthusiasm. Over the past 34 years the beer has become a household name, with the Hyderabad-born Bilimoria more than happy to embrace its consumer perception as a curry companion.

“It’s a phenomenal beer and it goes beautifully with all food, but in particular spicy food,” he adds with a grin. “That’s an objective fact.”

In 2011, Cobra became a subsidiary of Molson Coors, the Canadian-US multinational brewer. The split is 50.1% to 49.9% in favour of the conglomerate. “In practical terms I still own half of it and they own half,” Bilimoria explains. 

The move has allowed Cobra to expand its consumer base. The beer is now available in 40 countries worldwide, thanks to his partner organisation’s significant exporting power. But Bilimoria, 61, remains Cobra chairman and plays an active role in decision-making, from recipe refinements right through to packaging design. 

On whether more companies should be open to mergers or acquisitions, particularly during times of economic hardship, Bilimoria is non-committal. Everything comes down to “individual circumstances”, he says. However, he highlights that key conditions of the part-sale to Molson Coors were that Cobra would not just become one of a crowd and that he would continue to be involved in the business.

“That 0.1% is very important. It means that Molson Coors treats Cobra as one of its own, as opposed to somebody else’s brand,” Bilimoria says. “It’s run as a joint venture. I’m the chairman and I have been from day one, 14 years ago. And we work on a very collaborative basis.”

How drinking culture has changed in business

Even as someone who enjoys a drink, Bilimoria underscores the importance of “responsible drinking” both in and outside of a workplace context. Corporate drinking culture, in his experience, is on the wane. Business meetings “down the pub”, he says, are becoming less frequent, while he acknowledges that there are “potentially a million and one” different reasons why someone might choose to abstain from alcohol. 

“It could be to do with their religion, their health, or just their personality,” he says. Bilimoria points to Cobra’s growing range of alcohol-free options as an awareness of this evolving consumer trend.

Earlier this year, the Confederation of British Industry (CBI), for which Bilimoria serves as vice-president, was forced to sack several members of its senior staff, including director-general Tony Danker, after The Guardian newspaper published multiple claims of sexual misconduct and irresponsible behaviour by staff under the influence of alcohol

Does the country need the CBI? The answer is a resounding yes, because no other business organisation can do what we do

While Bilimoria does not deny that some of these things may have happened within a CBI setting, he puts this down to rogue individuals rather than a necessarily toxic culture at the organisation, as has been suggested in the media.

Rogue individuals, Bilimoria says, have been dealt with swiftly and in accordance with the severity of their offences. The CBI has been duly introspective, he adds, by hiring an external HR consultant and appointing a dedicated chief people officer. There were “definitely some mistakes in our governance structure”, Bilimoria admits, but the “scandal-hit” tag currently attached to the organisation is, in his view, a bit of a stretch. 

On reviewing the evidence against Danker, Bilimoria notes that the decision to remove him from his position was reached in “five minutes… I’m not sure how much quicker we could realistically have been.”

In 2023, is CBI membership still worth the cost? Bilimoria is bullish in his response. “We have always been, and this is a statement of fact, the pre-eminent business organisation in this country. Does the country need the CBI? The answer is a resounding yes, because no other business organisation can do what we do, or the breadth and depth of our economic expertise which we’ve built up over a long period of time.”

Where individual trade bodies may be at the mercy of self-interest, Bilimoria suggests that the CBI is better able to navigate “bigger-picture policy issues”, and appreciate how different sectors converge. Bilimoria points out that the furlough scheme, which kept many businesses afloat during the Covid-19 pandemic, was born out of CBI advice. 

“We are far more than a lobbying organisation,” Bilimoria says. “We’re an organisation that spots problems and comes up with solutions, and wants to act quickly, and to act with the government and make things happen.” 

Why governments should incentivise companies

For many years Bilimoria was a card-carrying member of the Conservative Party and even considered standing as an MP. But he left the party in the mid-2000s and now sits in the House of Lords as an independent.

While his economics remain firmly in favour of free markets – “I don’t believe you can grow an economy if you stifle business,” he warns – Bilimoria is highly critical of the narrative of “fear” which has been developed by some Tories around immigration. 

Bilimoria is an outspoken opponent of Brexit and resents the way in which skilled migration, which he feels is “necessary for growth”, has been grouped with the very real problems of human trafficking or smuggling. 

Raising corporation tax is a retrograde step… It’s a huge mistake

Populism, Bilimoria says, should not be allowed to distract from urgent policy needs. The majority of free trade agreements which have been reached with other countries post-Brexit, he highlights, are rollovers from the UK’s time as an EU member. Only three new agreements – with Japan, Australia and New Zealand – have been reached since the UK left the bloc. 

And Bilimoria is urging the government to step up its progress on this front. Noting that “only around 10% of UK companies are exporting their products and services,” he says more must be done to create new market opportunities for them.

For Bilimoria, when it comes to business the priority for any government, regardless of which party is in power, should be to “incentivise, rather than penalise”, particularly for greening initiatives. He describes the decision to raise corporation tax from 19% to 25% as a “retrograde step… It’s a huge mistake”.

In Bilimoria’s opinion, lower taxes and business rates would mean that companies could afford to, and would be more likely to, pay higher wages. Higher wages, he suggests, would lead to a better quality of life and therefore increased productivity at work.

And what does Bilimoria make of the prospect of a Labour-led government in 2024? “Everything I’m hearing from [shadow chancellor] Rachel Reeves and [Labour leader] Keir Starmer is that they’re going to be business-friendly,” he ponders. “They haven’t said it in so many words but I wish they would… that they’re going to emulate Tony Blair and Gordon Brown, when the top rate of tax was 40% for income tax and when capital gains tax was 18%, and when entrepreneurs’ relief was 10%.”

In many ways, Bilimoria adds, the last Labour government “was one of the most business-friendly governments that I as an entrepreneur [have] experienced.”

Training and technology are necessary for growth

While going back to the future may be good for Labour, Bilimoria believes that ambitious companies should never be content with standing still. As the chancellor of the University of Birmingham, he is a passionate proponent of lifelong learning and urges business leaders to view technology as a catalyst to retrain and redeploy staff, rather than replace them.

Cobra was an early adopter of automation to speed up its factories in Burton upon Trent, Roeselare in Belgium and Patna in the Indian state of Bihar. And, though he accepts the need for “sensible regulation” around emerging tech, Bilimoria welcomes the advent of artificial intelligence and quantum computing as the next great “business-enhancing” innovations.

Indeed, as with the internet revolution, Bilimoria is confident that new tech will create many more jobs than it replaces. “It’ll enable businesses to do things they could not do before. And it’ll enable people to get better and to train in new skills. That’s the bottom line.”

Bilimoria wants UK politicians to learn from India, which he says has embraced the spirit of entrepreneurship. If any government is serious about empowering business, Bilimoria says they will need to create an environment where people “would find it easy to grow”. That means investment in R&D, transport connectivity, safe and legal routes for skilled immigration and a clear, strong “outward-facing mindset”.