Lord Mandelson attacks Starbucks boss for talking down UK economy
NEW YORK - Business secretary Peter Mandelson has engaged in a four-letter rant about the chief executive of Starbucks for criticising the state of the UK economy, as the coffee chain prepares to launch its Via Ready Brew instant coffee brand.
Howard Schultz, whose company is to cut 6,700 of its 167,000 staff and shut 300 of its underperforming outlets after announcing 69% drop in profits during the first quarter, described the UK economy as "in a spiral" while talking on US business channel CNBC.
An angry Lord Mandelson, who appeared on the channel an hour after Schultz, retorted: "The UK is not spiralling, although I have noticed that Starbucks is in a great deal of trouble.
"But that may be because of their overexposure given the state of the market. So please do not project Starbucks onto the UK economy as a whole."
Lord Mandelson's language was more forthright at a later diplomatic reception. He said: "Why should I have that guy running down the country? Who the fuck is he? How the hell are they [Starbucks] doing?"
Schultz, who had been asked by CNBC interviewer Maria Bartiromo about the launch of Via Ready Brew, had said: "Concern for us is Western Europe and specifically the UK. The UK is in a spiral."
Spiral or not, Starbucks' Via Ready Brew will be available from selected London shops from March 25. It will be pre-portioned into packets of three sachets or in boxes of 12 and priced at £1.20 and £3.95 respectively.
The launch of an instant variant follows a move last summer to offer US diner-style free refills at its UK outlets in response to belt-tightening consumers and the economic downturn. The company says it has been working on the product for more than 20 years and describes the instant coffee as a "breakthrough".
Schultz said that people being served the coffee could not tell the difference between instant and fresh brewed.
The instant coffee market is worth around $17bn globally -- Starbucks said its new product offers the struggling firm a significant opportunity.
In the UK the opportunity is particularly large. Instant coffee accounts for 81% of all coffee sales.
Starbucks apologises to Mandelson
Source: http://news.bbc.co.uk/1/hi/uk_politics/7897394.stm
US coffee chain Starbucks has apologised for comments about the UK economy which prompted a four-letter word tirade from Lord Mandelson.
The business secretary hit out at comments by Starbucks chairman Howard Schulz said in a TV interview that the UK was in an economic "spiral".
A Starbucks spokesman said there had been no intention by the company to criticise the UK economy.
The peer welcomed the apology, saying he considered the matter closed.
Lord Mandelson denied Mr Schulz's claim about the economy in an interview with the TV channel. But newspaper reports suggest the business secretary later used abusive language about Mr Schulz.
Speaking at a diplomatic reception in New York, Lord Mandelson is reported by The Daily Telegraph to have launched into an angry tirade against Mr Schulz, saying: "Why should I have that guy running down the country?".
He then reportedly used a four-letter word to ask who Mr Schulz was, adding: "How the hell are they [Starbucks] doing?"
Closures
Asked to comment on the story, a spokesman for Lord Mandelson said: "We don't stand by the language. But we do stand by the sentiment."
Starbucks has recently announced the closure of nearly 1,000 unprofitable shops around the world.
Mr Schulz's criticism came in an interview with Maria Bartiromo, of US financial channel CNBC, where he was promoting the launch of a new product.
He was quizzed about international business conditions and the economic situation in the UK, telling Ms Bartiromo: "Unemployment, the subprime mortgage crisis specifically in the UK, and I think consumer confidence in the UK is very, very poor."
Lord Mandelson appeared on the same programme an hour later to insist Mr Schulz was wrong about the British economy.
He said: "The UK is not spiralling, although I have noticed that Starbucks is in a great deal of trouble. But that may be because of their overexposure given the state of the market. So please do not project Starbucks onto the UK economy as a whole."
But the Starbucks spokesman insisted there had been no intention to criticise the performance of the British economy.
"It is a difficult economic situation in the US and around the world. Please be assured that Starbucks has no intention of criticising the economic situation in the UK," he said.
"The reality of the global economy is that no country is immune to the difficulties. We are all in this together and as a global business we are committed to each and every market we serve.
Lord Mandelson said: "I am glad that Mr Schultz has stepped back from his original remarks. I made my point and regard the matter as closed."
