In 2001, the battle of the coffee machines came to Lygon Street in Melbourne. The old masters of the Mediterranean who brought their coffee-making skills to Melbourne as post-war migrants were facing a new enemy: Starbucks.
Lygon Street is sacred ground for caffeinistas: its boasts a large student population, a bloody history with a spate of gangland murders, and has the highest concentration of pasta and density of latte fumes per square kilometre. In short – it's unique. Not the place for cookie-cutter American chains, complained the old guard.
In an interview with ABC radio in 2001, local traders said they had gone to the Melbourne City council to get the Starbucks closed down.
Jean Carlo Justi of Universita Cafe told the ABC: "I think that people know Starbucks you know, they should think that they are a fish like out of water in a way because it's not in tune with our street … We are more cosmopolitan."
Yet Starbucks moved in – its shock and awe business model meaning that chains sprung up almost overnight in Australia's major cities, clustering in cafe strips and putting the frighteners on independent retailers.
However, over the years the Lygon Street Starbucks seemed a bit forlorn. One blogger posted in a Yahoo chatroom: "There is a Starbucks in Lygon Street in Carlton nestled amongst all the restaurants and cafes. Strangely enough, it is always empty when I walk past." Ouch!
Then came the announcement this week that Starbucks was staging a massive retreat from Australia, with 70% of its 84 stores closing because of under-performance. Employees were summoned to meetings to learn whether or not theirs was one of the 61 "underperforming" stores to be closed by Sunday, and if they were one of the 683 employees to lose their job.
The Age reported: "although the list of the stores to be closed has not been released, it is believed the controversial Starbucks shop in Lygon Street, Carlton, is among them."
The Lygon Street old guard had won. And in that is a valuable lesson for global businesses, who assume a "one-size fits all" approach when advancing into new markets.
Australians are fairly relaxed about munching on an American chain store burger or seeing a Hollywood blockbuster or partaking in any number of consumer activities that have been imported from America – yet with coffee we tend to be passionately snobby.
A newly arrived Australian in London may well complain about the weather – but I bet you a complaint about the coffee is not far behind. A common whine among Australian expatriates that I know is that the coffee chains have taken over the high street, and should you venture out into an independent you are risking being handed scalded, grey milk ("with bits in it") for your two quid.
Enterprising Antipodeans are going into business to service this army of beverage snobs who scour the capital looking for a piccolo or a flat white.
As for the choices on offer at Starbucks: a discerning Australian caffeinista would sooner put vanilla syrup in their coffee or whipped cream on it than heat up a Slurpee in the microwave.
Starbucks said the Australian closures were not connected to recent closures in the US, linked more directly with the economy: so could it be that our coffee snobbery felled the US giant?
Retail analyst Barry Urquhart told the Age that Starbucks failed in Australia in part "because they didn't understand and respect the unique and differing characteristics of the Australian coffee consumer".
"In America, Starbucks is a state of mind. In Australia, it was simply another player," he said.
An entrenched presence of independent cafes as well as leading local brands such as Hudson's in Melbourne made it difficult for Starbucks to capture the following it needed, he said.
There are probably many complex reasons why Starbucks failed in Australia but one stands out – they just didn't know how to make good coffee – not like the old masters.