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War of Words: Starbucks vs. Britain

Britain's Secretary of State for Business Enterprise and Regulatory Reform Lord Peter Mandelson caused a stir earlier this week when he slammed Starbucks CEO Howard Schultz's negative comments about the UK's economy.

On Tuesday, during the on-air interview regarding the launch of Starbucks' new instant coffee brand 'Via', the Starbucks chairman, president and CEO told CNBC's Maria Bartiromo that although "it hasn't got any worse in North America" ... "the place that concerns us the most is Western Europe, specifically the UK. The UK is in a spiral."

Lord Mandelson replied shortly after Schultz's comments, telling CNBC: "No, the UK is not spiraling. Although, I noticed Starbucks is in a great deal of trouble, but that may be because of their overexpansion, given the state of the market. So please don't project Starbucks onto the UK economy as a whole."

Mandelson didn't stop there, lambasting the coffee giant's top exec further at a diplomatic cocktail reception, saying: "Why should I have this guy running down the country? Who the ---- is he? How the hell are they [Starbucks] doing?" according to several published reports.

Starbucks has announced it will close nearly 1,000 stores.

Starbucks later issued a conciliatory statement insisting it was committed to the UK.

"It is a difficult economic situation in the US and around the world. Please be assured that Starbucks has no intention of criticizing the economic situation in the UK. We are all in this together and as a global business we are committed to each and every market we serve," the company said.

According to the Guardian newspaper's Web site, Mandelson said he regarded Starbucks' statement as in effect closing the issue.

Mandelson was in New York to deliver a speech warning that European Union member states faced a threat from competing bailout programs for different industrial sectors.