When Mandy Met Howie

The UK Business Secretary launched a furious attack on the coffee king, accusing him of spreading gloom and despondency about the British economy.

Speaking at a diplomatic cocktail party in front of a room of journalists, Mandelson, who was reacting to an interview given earlier by Schultz on the US channel CNBC, said: "Why should I have this guy running down the country? Who the f**k is he? How the hell are they (Starbucks) doing?"

Schultz had singled out Britain as a source of anxiety for Starbucks. "The place that concerns us the most is western Europe, and specifically the UK," he said. "The UK is in a spiral." Mandelson's attack had been simmering all day as he had been in the same television show when Schultz made the remarks. As soon as got on air he rebutted the claims, but he left it until later in the day to release his full fury.

I've always been a massive fan of Schultz, who is one of the real heroes of our industry. Mandelson hardly falls into the warm and cuddly mould, but you cannot but admire his skills as a political operator - not least for being the man who made Labour electable.

On this occasion, Mandelson might have a point, after all Starbucks saw a 69% drop in profits in the three months to December and is shutting 300 stores, in addition to 600 closures last year, at a cost of nearly 7,000 jobs.

The UK is also one international market where Starbucks has stiff competition, from the likes of Costa and Caffe Nero, not to mention the new breed of hybrid cafes providing a coffee shop alternative, such as Le Pain Quotidien or Carluccio's. Perhaps Schultz and Starbucks just need to get better at operating, rather than moaning?