Quebec Judge Greenlights Class Action Lawsuit Over Coffee Chain Milk Alternative Surcharges
A Quebec Superior Court judge has authorized a class action lawsuit against three major coffee chains — Starbucks, Second Cup, and Tim Hortons — alleging that the companies charged Canadian consumers unfair and inflated surcharges for non-dairy milk substitutions in their beverages.
The Allegations
The lawsuit, filed by law firm LPC Avocats on behalf of plaintiff Liel Ohayon, claims that for years the three chains imposed unreasonable fees on consumers who requested plant-based milk alternatives such as soy, oat, almond, or coconut milk. According to the case summary, Starbucks and Second Cup charged a surcharge of $0.80 plus tax per substitution, while Tim Hortons charged $0.50 plus tax.
The law firm argued that these surcharges were “abusive and unreasonable,” noting that the actual cost of non-dairy milk alternatives to the chains was “a fraction of that amount.” The lawsuit alleged the fees violated Quebec’s Consumer Protection Act.
What the Court Found
In her ruling, Superior Court Judge Catherine Martel highlighted a significant disparity between what the chains paid for plant-based milk and what they charged customers. Starbucks admitted it incurred an additional cost of just $0.12 to substitute a dairy-free option for cow’s milk, yet charged consumers $0.80 — more than six times its actual cost.
“It is disproportionate to charge the consumer more than six times what it costs the retailer to replace cow’s milk with plant-based milk,” Judge Martel stated in court documents. She added that this level of markup was “sufficiently large to cause serious harm to the consumer.”
The court also examined procurement cost data submitted by the defendants. The figures showed that milk alternatives cost Starbucks 16 percent more than cow’s milk, while they cost Foodtastic — the parent company of Second Cup — 98 percent more. Tim Hortons franchisees, according to TDL Group, paid 63 percent more for dairy alternatives in western Quebec and 67 percent more in eastern Quebec.
Based on these figures, the court calculated that Second Cup charged $0.80 for a replacement that cost the chain $0.43, while Tim Hortons charged $0.50 for a replacement that cost $0.28 in eastern Quebec. The judge ruled these markups “suggest that it can be argued that the surcharges on milk substitutes at the defendants’ restaurants are unfair within the meaning of Section 8 of the Consumer Protection Act.”
Who Is Affected
The class action covers all Quebec consumers who were charged for non-dairy milk substitutions at the three chains during specific date ranges: Starbucks (December 30, 2021 to November 7, 2024), Second Cup (December 30, 2021 to February 27, 2025), and Tim Hortons (December 30, 2021 to January 2, 2025).
Notably, Starbucks stopped charging a surcharge for dairy-free substitutes in November 2024, before the lawsuit was filed.
What the Lawsuit Seeks
According to LPC Avocats, the purpose of the class action is to seek an injunction ordering Second Cup and Tim Hortons to stop charging surcharges for non-dairy milk substitutes, as well as restitution and punitive damages for affected class members.
What Happens Next
It is important to note that the judge’s ruling does not determine whether the three chains acted unlawfully. The decision simply authorizes the case to proceed as a class action, allowing the claims to move forward through the legal process.
The lawsuit also referenced a Dalhousie University study suggesting that plant-based milk costs approximately the same as cow’s milk. However, Judge Martel rejected this argument on the grounds that the retail price of cow’s milk is regulated in Quebec, whereas the price of plant-based milk is not. The case instead moved forward based on the procurement cost data provided by the defendants themselves.
The request for class action authorization was filed on December 30, 2024, and the case continues to develop as one of the more closely watched consumer protection matters in Quebec.
