Non-Dairy Surcharge Sparks Class Action Lawsuit Against Major Coffee Chains

A class action lawsuit in Canada accuses Starbucks, Tims, and Second Cup of charging excessive surcharges on non-dairy milk alternatives. The plaintiffs argue that plant-based milks cost the same as or less than regular milk, yet the chains have collected tens of millions in extra fees. Tims has adjusted its policy, and Starbucks removed its surcharge earlier. The case has ignited industry debate over the fairness of plant-based pricing.

Filed by a former Concordia University student, the lawsuit claims the chains engaged in price gouging since late 2021, charging an extra 0.5 to 0.8 Canadian dollars per drink. Research from Dalhousie University shows non-dairy milks retail at similar or lower prices than dairy. The plaintiff, a vegan, represents about 850,000 vegans in Canada. The lawyer argues the surcharge is malicious fraud and a major profit source.

Recently, a class action lawsuit in Canada has thrust Starbucks, Tims, and Second Cup into the spotlight, accusing the three coffee chains of long-term surcharges on non-dairy alternatives, alleging price gouging. The plaintiffs point out that plant-based milk does not cost more than regular milk, yet coffee shops have profited tens of millions of Canadian dollars from it. Tims has announced adjustments to its charging policy for certain beverages, and Starbucks previously eliminated related surcharges. This lawsuit is not only about consumers' wallets but also sparks widespread industry discussion on the reasonableness of plant-based milk pricing.

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According to the National Post, an unnamed former Concordia University student recently filed a class action lawsuit targeting Starbucks, Tims, and Second Cup, alleging that these three chains have long engaged in "price gouging."

The lawsuit states that for years, these brands have been "taking advantage of consumers" because some customers, due to medical reasons such as lactose intolerance, or for health, personal, social, and environmental considerations, request non-dairy alternatives to milk in their drinks.

For example, the student who filed the lawsuit is a vegan and must choose plant-based milk when buying drinks like lattes. In Canada, there are about 850,000 vegans like him.

The lawyer representing the case claims that since December 30, 2021, these three coffee chains have charged an additional 0.5 to 0.8 Canadian dollars for non-dairy alternatives, pocketing tens of millions of Canadian dollars in profits.

The lawsuit documents cite research data from Dalhousie University's Agri-Food Analytics Lab: the retail price of soy milk, almond milk, and coconut milk is 0.21 Canadian dollars per 100 milliliters, oat milk is 0.23 Canadian dollars per 100 milliliters, while regular milk also retails at 0.23 Canadian dollars per 100 milliliters.

Thus, the cost of non-dairy alternatives is not higher than that of regular milk. Based on this, the lawyer argues that the chains' practice of charging consumers a surcharge for plant-based milk constitutes "malicious fraud," and coffee shops should not charge extra to customers who choose alternatives.

"However, ironically, the non-dairy surcharge has become a cash cow for the defendants." The lawyer revealed that Tims charges 0.5 Canadian dollars for plant-based milk, generating 550,000 Canadian dollars in profit daily, with cumulative profits over three years reaching as high as 602.25 million Canadian dollars.

In response to the allegations, Tims stated: "Our policy has always been to charge for non-dairy alternatives added to original coffee, dark roast coffee, or tea, which differs from the claim that this may have happened over a billion times in the past three years. This claim is inaccurate, and we believe it demonstrates the lawsuit lacks merit."

Tims also stated that starting January 2, it will no longer charge extra for non-dairy alternatives in beverages other than original coffee or dark roast coffee.

Prior to this, Starbucks announced on November 7, 2024, that it would eliminate the 0.8 US dollar surcharge, stating that substituting non-dairy milk for milk is the second most popular customer request. Starbucks Canada said in a statement that it is aware of the class action but "cannot comment on pending litigation."

As for the other coffee giant involved in the lawsuit, Second Cup, it has not yet responded to the class action.

It is worth noting that, according to related reports, this class action seeks an injunction requiring the coffee chains to stop charging extra for non-dairy alternatives, while compensating Canadian consumers who were forced to pay the surcharge, and imposing punitive damages on the brands.

Therefore, according to the application, if Canadian consumers have been charged a non-dairy surcharge at these three coffee chains since December 30, 2021, they can join this class action against the coffee giants.

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