Starbucks among chains named in class-action lawsuit for surcharging customers

Canadians who have paid extra for non-dairy substitutes in their drinks could be part of a class-action lawsuit against major coffee chains.

A lawsuit filed by Quebec law firm LPC Avocats alleges that Starbucks, Second Cup and Tim Hortons acted in “bad faith in gouging consumers by charging them $0.50 to $0.80 for non-dairy substitutes that cost them no more than regular milk.”

Starbucks dropped its surcharge for non-dairy substitutions on November 7, 2024.

“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,” reads the court document.

The lawsuit, pending authorization, was brought forward by a Concordia University student in Quebec who has been a vegan for nine years. The student said that she purchased beverages at least once a week from Second Cup and has paid a surcharge of $0.80 for soy or oat milk.

The suit argues that Tim Hortons, Second Cup and Starbucks should not charge extra for non-dairy and dairy substitutes, as they cost the same. On average, the price of non-dairy substitutes is on par with regular milk, according to a report by the AgriFood Analytics Lab at Dalhousie University.

The court document notes that soy milk, almond milk and coconut milk retail for $0.21 per 100 ml, and oat milk retails for $0.23 per 100 ml. In comparison, regular Québon milk retails for $0.23 per 100 ml.

It also points out that there’s no additional labour cost for baristas making drinks using non-dairy substitutes.

“Yet, charging for non-dairy substitutes is ironically a real cash cow for the Defendants,” states the lawsuit. LPC Avocats alleges that Tim Hortons charged customers $0.50 for non-dairy substitutes, bringing in daily profits of $550,000 per day and $602,250,000 over three years.

“It has never been our policy to charge a fee to have a non-dairy beverage added to an Original or Dark Roast coffee, or tea – contrary to the claim that this may have occurred more than a billion times within the last three years,” Tim Hortons said in a statement.

“This suggestion is inaccurate, and we believe it is indicative of the lack of merit in the claim. The decision that Tim Hortons would no longer charge for non-dairy options for other beverages starting on January 2 significantly pre-dated this court filing.”

Before January 2, Tim Hortons charged extra for non-dairy substitutes in coffee beverages other than its Original or Dark Roast coffee. These included iced and hot cappuccinos and lattes.

Starbucks and Second Cup have also been contacted for comment.

CBS News reports that in 2024, a similar lawsuit against Starbucks was filed in the U.S. The lawsuit alleges that the coffee chain charged customers with lactose intolerance and milk allergies “an excessively high surcharge to substitute non-dairy alternatives in its drinks.” Dunkin’ was also hit with a similar lawsuit the same year.

Are you eligible?

The lawsuit aims to obtain an injunction preventing Second Cup and Tim Hortons from charging extra for non-dairy alternatives. It’s also seeking reimbursement and punitive damages for Canadians who have had to pay these surcharges.

According to a 2016 census documented in the Journal of the Canadian Association of Gastroenterology, around 44% per cent of Canadians are lactose intolerant.

Canadians are eligible for reimbursement of the whole or portion of the surcharge that they paid for a non-dairy substitute. They’re also eligible to receive punitive damages, an amount yet to be determined.

What should you do next?

You can sign up for more information on developments in this class action.