Page last updated at 18:44 GMT, Wednesday, 18 February 2009

Starbucks apologises to Mandelson

Lord Mandelson
Lord Mandelson insisted the UK economy was not in a 'spiral'

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 Schultz in a TV interview that the UK economy was in "spiral" of decline.

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 appeared on financial channel CNBC shortly after Mr Schultz to rebut his comments.

But speaking later at a diplomatic reception in New York, he is reported to have launched an angry tirade against the Starbucks boss, saying: "Why should I have that guy running down the country?".

He then reportedly used a four-letter word to ask who Mr Schultz was, adding: "How the hell are they [Starbucks] doing?"

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."


Mr Schultz's criticism came in an interview with CNBC's Maria Bartiromo.

I am glad that Mr Schultz has stepped back from his original remarks. I made my point and regard the matter as closed.

Lord Mandelson

Quizzed about international business conditions and the economic situation in the UK, he said: "The place that concerns us the most is western Europe and specifically the UK."

He added: "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 Schultz 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."

Starbucks recently announced the closure of nearly 1,000 unprofitable shops around the world.

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