As soon as I enter a directory with `.bzr` and issue any command
I get the following:

bzr: warning: unsupported locale setting
  bzr could not set the application locale.
  Although this should be no problem for bzr itself, it might
  cause problems with some plugins. To investigate the issue,
  look at the output of the locale(1p) tool.

Here are some details about my system:
Ubuntu: 12.04
Guest in VMware
Connected through SSH

Various settings:
[john@ubuntu]❯ locale -a 
C
C.UTF-8
en_AG
en_AG.utf8
en_AU.utf8
en_BW.utf8
en_CA.utf8
en_DK.utf8
en_GB.utf8
en_HK.utf8
en_IE.utf8
en_IN
en_IN.utf8
en_NG
en_NG.utf8
en_NZ.utf8
en_PH.utf8
en_SG.utf8
en_US.utf8
en_ZA.utf8
en_ZM
en_ZM.utf8
en_ZW.utf8
POSIX

[john@ubuntu]~❯ locale
LANG=en_US.UTF-8
LANGUAGE=en_US.UTF-8
LC_CTYPE="en_US.UTF-8"
LC_NUMERIC="en_US.UTF-8"
LC_TIME="en_US.UTF-8"
LC_COLLATE="en_US.UTF-8"
LC_MONETARY="en_US.UTF-8"
LC_MESSAGES="en_US.UTF-8"
LC_PAPER="en_US.UTF-8"
LC_NAME="en_US.UTF-8"
LC_ADDRESS="en_US.UTF-8"
LC_TELEPHONE="en_US.UTF-8"
LC_MEASUREMENT="en_US.UTF-8"
LC_IDENTIFICATION="en_US.UTF-8"
LC_ALL=en_US.UTF-8

[john@ubuntu]~❯ cat /etc/default/locale
LANGUAGE=en_US.UTF-8
LC_ALL=en_US.UTF-8
LANG=en_US.UTF-8
LC_TYPE=en_US.UTF-8

[sa@ubuntu]~❯ python -c "import locale; locale.setlocale(locale.LC_ALL, ''); print locale.getlocale()"
('en_US', 'UTF-8')