Quebec lawsuit against Tim Hortons, Starbucks and Second Cup over cost of milk alternatives approved

A Quebec judge has authorized a class-action lawsuit that alleges Starbucks, Second Cup and Tim Hortons charged Canadian consumers unfair prices for milk alternatives.

Law firm LPC Avocats alleged in a summary of the case against the coffee chains: “For years, Starbucks, Second Cup and Tim Hortons have been price gouging consumers who requested non-dairy substitutes in their beverages, either because of medical reasons (such as lactose intolerance), or other health, personal, social or environmental reasons (such as vegans representing approximately 5% of Canadians).”

They added that Starbucks and Second Cup charge “an abusive and unconscionable” surcharge of $0.80 plus taxes for non-dairy substitutes, while Tim Hortons charges $0.50 plus taxes.

They said the non-dairy substitutes, such as soy, oat, almond and coconut milks, cost the coffee chains “a fraction of that amount.”

According to Wednesday’s ruling, Starbucks admitted that it incurs an additional $0.12 for substituting cow’s milk for a non-dairy option, but charges the customer $0.80 for the alternative.

“By its own admission, Starbucks therefore charges consumers more than six times the cost it incurs when it replaces cow’s milk with plant-based or lactose-free milk in its beverages,” Superior Court Justice Catherine Martel said according to court documents .

She added that it is “disproportionate to charge the consumer more than six times what it costs the merchant to substitute cow’s milk with plant-based milk” and that this disproportion is “sufficiently significant to cause serious harm to the consumer.”

The class-action lawsuit includes all consumers in Quebec who were charged for a non-dairy substitute at Starbucks (between Dec. 30, 2021 and Nov. 7, 2024), Second Cup (between Dec. 30, 2021 and Feb. 27, 2025), and Tim Hortons (between Dec. 30, 2021 and Jan. 2, 2025).

LPC Avocats says the purpose of the class action is to obtain an injunction ordering Second Cup and Tim Hortons to cease surcharging for non-dairy substitutes, as well as reimbursement and punitive damages for class members.

Starbucks ceased imposing a surcharge for non-dairy substitutes in November 2024.

The ruling does not determine whether Starbucks, Second Cup and Tim Hortons acted unlawfully, but allows the case to proceed.

The application to authorize a class action was filed on Dec. 30, 2024, and the plaintiff, Liel Ohayon, alleges the surcharges violated Quebec’s Consumer Protection Act, using the results of a Dalhousie University study that suggested plant-based milks cost roughly the same as cow’s milk.

However, Justice Martel rejected this, on the basis that “the retail price of cow’s milk is regulated in Quebec, while the price of plant-based milks is not,” according to court documents.

The case instead advanced based on procurement costs submitted by the defendants, which showed that dairy alternatives cost Starbucks 16 per cent more than cow’s milk, while they cost Foodtastic (the owner of Second Cup) 98 per cent more. TDL Group said Tim Hortons franchisees paid 63 per cent more for dairy alternatives in western Quebec and 67 per cent more in eastern Quebec.

The court calculated that this means Second Cup charged $0.80 for a substitution that cost the chain $0.43, while Tim Hortons charged $0.50 for a substitution that cost $0.28 eastern Quebec.

The ruling said that these figures “indicate that it is possible to argue that the price surcharges for dairy substitutes in the defendants’ restaurants are unfair within the meaning of section 8 of the Consumer Protection Act.”

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