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Suppose Alice has a restaurant where she serves pies for £10. She can make them with gluten free bases for the allergic, and these bases cost her £3 over the regular ones' £0.5. However, to make one a gluten free pie, she charges £14 thereby profiting more from the allergic than the non-allergic. Is she committing unlawful discrimination or otherwise behaving in an unlawful manner?

Edit: I think the rationale is most likely they see that many people are willing to pay more for the gluten free so they charge extra. They don't realize that for some it isn't a choice and so thus their attempt to profiteer from a trend could possibly be illegal.

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    Her cost of production is at least £3 higher and the retail price is £4 higher. Is her cost to produce a £10 glutenous pie greater than or less than £7.50? Suppose it's exactly £7.50, in which case the cost to produce a gluten free pie is at least £10.50. Must she sell that pie at a loss? If so, she'll elect not to sell such pies, which will not advance the interests of those with celiac disease who like to eat pie. Even requiring her to sell for £13 means that she'll make a margin of at most 24% instead of 33%, which might cause her to stop offering the product.
    – phoog
    Commented Sep 26, 2022 at 13:08
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    Cost of production is not just cost of ingredients. For example she probably has a separate counter/bench for gf pies, with separate tools and so on. She needs to recoup the cost of that equipment over time. Also, she had to train her staff (paying them while they weren't producing) on the importance of say, not dusting the bench with regular flour while rolling out a gf pie. "Profiteering" is a strong word and definitely doesn't apply here.
    – Kate Gregory
    Commented Sep 26, 2022 at 13:32
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    Almost all commenting seem to ignore that the premise of the question is that Alice is merely charging more because it's what she thinks the (fad-ridden) market will let her get away with. That was specified by the asker.
    – JosephCorrectEnglishPronouns
    Commented Sep 26, 2022 at 13:53
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    @JosephP. That assessment is most certainly not evident in the question.
    – MonkeyZeus
    Commented Sep 26, 2022 at 21:02
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    @JosephP. Such critical clarifications should be edited into the question. The whole question should probably re-written based on such a revealing comment. Comments moved to chat may as well not exist from my experience.
    – MonkeyZeus
    Commented Sep 26, 2022 at 21:40

5 Answers 5

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Is she committing unlawful discrimination or otherwise behaving in an unlawful manner?

No.

She would be — if she was saying like "customers with Celiac disease pay £14, others £10".

But instead, she simply offers different products at different prices. She makes it clear which option is what. Everyone can buy the option of their choice for the same price — she is happy to sell either or both options to whoever chooses them regardless of their allergies or disabilities.

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    Which jurisdiction is this answer based on? For example in England and Wales the basis of this answer would be incorrect due to the principle of indirect discrimination in Section 19 of the Equality Act 2010. It may well be that the discrimination would be lawful for some other reason, just not for the reason given here. A jurisdiction tag is definitely needed for this answer.
    – JBentley
    Commented Sep 25, 2022 at 17:55
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    @JBentley I strongly disagree that s 19 Equality Act 2010 applies. Alice doesn't apply any provisions to persons at all. This answer works with all the tags attached to the question, so no additional tagging needed.
    – Greendrake
    Commented Sep 25, 2022 at 22:08
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    Don't forget that, while the material costs may only increase by £3, there are also other considerations to take into account for the pricing; e.g if Gluten-Free pies sell less frequently, then there is Shrinkage (i.e. when unsold pies are chucked out) and Loss-of-Earnings if Alice sells out of Gluten Pies, because some of her capacity was used to make the then-unsold Gluten-Free pies. Or even the extra time & effort involved in cleaning everything to a sufficient standard to prevent cross-contamination. At National Living Wage, 6 minutes & 18 seconds of extra cleaning "costs" £1.
    – Chronocidal
    Commented Sep 25, 2022 at 23:58
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    This is exactly why the bakery won in the famous "gay cake" case. The bakery never said they won't serve gay customers (despite part of the sensationalist media trying to spin the story that way). They only refused to bake a cake with a specific political slogan requested by the customer. However, the customer was still free to buy any of the existing cakes on the menu.
    – vsz
    Commented Sep 26, 2022 at 6:48
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    You folks pushing for something like this to be illegal will only result in this baker not offering any gluten free pies at all...
    – SnakeDoc
    Commented Sep 26, 2022 at 15:08
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The courts have shown a willingness to apply the ADA to celiac disease (e.g., Colonial Williamsburg lost a lawsuit when sued for disallowing a guest to bring their own gluten-free food), so the real question would be whether charging more for gluten-free would be legal.

I'll note that restaurants (and grocery stores) regularly charge more for gluten-free products. To my knowledge, P.F. Chang's is the only one who got sued over it. However, the plaintiff dropped the lawsuit.

https://www.forbes.com/sites/legalnewsline/2016/05/11/woman-dropping-lawsuit-over-gluten-free-surcharge-at-p-f-changs/?sh=23537f126d16 .

"Offer gluten-free food, but charge extra since it costs more" may constitute a reasonable accommodation under ADA. However, to my knowledge this hasn't been tested in court. So, there isn't yet a conclusive answer.

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    @gnasher729 it's "supply and demand". Vegan is a personal choice (even if they think it's a necessity).
    – Weather Vane
    Commented Sep 23, 2022 at 21:55
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    "Why are these silk clothes more expensive than polyester? They discriminate against the only natural fibre I can wear!"
    – Weather Vane
    Commented Sep 23, 2022 at 22:09
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    Your example in the first paragraph is interesting, but there is a big difference between disallowing a person to privately accommodate their individual situation, (especially when such accommodation does not affect others) and being forced to provide that same accommodation. Especially for a purely optional thing like pie...
    – Michael Hall
    Commented Sep 24, 2022 at 17:30
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    From the linked article, the judge states that it's possible that "gluten-free" is sufficiently different that a different price is reasonable: “The evidence may establish that gluten-free items are different products for which Defendant can charge what it determines is appropriate. That would not be discriminating against a customer with celiac disease because the gluten-free meals are offered to all customers at the same price.”
    – minnmass
    Commented Sep 24, 2022 at 22:56
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    @JosephP. As someone who has (repeatedly) worked with both Gluten-Free and non-Gluten-Free pastry, I can assure you that the Plaintiff's claim is complete bunk. It is significantly more difficult and time-consuming to make a pie casing without cracks or leaks from Gluten-Free pastry, compared to doing so with non-Gluten-Free pastry. There are certain gluten-free foods that are no harder to work with than their glutened equivalents, but it is far from the universal truth that the Plaintiff asserts.
    – Chronocidal
    Commented Sep 26, 2022 at 17:50
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Alice replies that the higher price of the gluten-free bases is not the only related cost facing her business. There is also the cost of seeking out additional reputable, high-quality suppliers, of separately accounting for those purchases, for changing stock control and kitchen procedures to make sure the ingredients are never mixed up, and no contamination occurs, and extra liability/risk should a mistake be made and a customer sues for illness, loss of reputation, etc. There's staff training, quality control inspections and testing, and possibly additional H&S regulations to satisfy. Alice probably had to experiment with the recipe, to compensate for the lack of gluten on taste and texture. Quantifying all those costs objectively would be difficult - many overheads are not easily separable into ingredient-attributable components.

And I think a business might also argue that the proper mechanism for preventing profiteering is competition. If one restaurant overcharges, the others can undercut them and take their trade. It is the extra profits to be made that attracts businesses into offering risky new products. Suppose nobody in the market currently offers gluten free pies. There is a gap in the market. But is there any demand, and if so is there enough to make it worth the hassle of researching suppliers, setting up production, and maybe only then discovering that hardly anybody wants to buy them? There is a risk of losing the investment. So it is standard practice in industry that new products are initially and temporarily sold at a premium, so that the profits from the successes pay for the losses from the flops. If it proves successful, prices will soon be forced down by competition. Only if there is evidence that there is widespread prejudice blocking the price-reducing action of competition should the law intervene. The inevitable consequence of banning businesses charging higher profits when offering new and exclusive products would be that nobody would have any reason to offer those products - an even worse situation for those with allergies and special food needs. High profit is how the market drives (and funds) businesses to increase supply to meet unsatisfied demand. Presumably it was not the intention of Parliament in passing this legislation to destroy all economic incentives for innovation in this area and thus make the provision of specialised products for the disabled even worse.

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    Many laws exist to address the inevitable failures of market competition: if they didn't, then virtually no restaurants might have wheelchair ramps.
    – JosephCorrectEnglishPronouns
    Commented Sep 24, 2022 at 18:52
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    If the law mandates not only what foods restaurants must supply, but also the prices they must charge, then yes, the question is moot. It becomes a hidden tax. One can certainly use a government-controlled command economy rather than a market. But if you expect the market to provide, then you must allow market forces to work. The market charges higher profits for all undersupplied products, products for the disabled are not treated any differently. If a law is applied in a way that selectively does damage to disabled economic interests, that's discrimination (in fact, if not in law).
    – Nullius in Verba
    Commented Sep 24, 2022 at 19:43
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    If there is no requirement that a restaurant serve food that is safe for someone with a particular alergy, and the cost of stocking extra ingredients, providing extra staff training, etc. required to serve the people would exceed the monetary benefits were it not for a wealthy patron who is willing to pay enough to make such measures worthwhile for the restaurant owner, I see no reason the restaurant owner should be required to refuse such an offer, nor for it not to be allowed to extend the offer to anyone willing to pay the price. In many cases, what gets characterized as "price gouging"...
    – supercat
    Commented Sep 25, 2022 at 17:53
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    ...could be more accuragely described as "not really wanting to do something, but willing to do so anyway if paid enough to make it worthwhile".
    – supercat
    Commented Sep 25, 2022 at 17:54
  • To add to your list, there are also other economies of scale to consider.
    – arp
    Commented Sep 27, 2022 at 0:57
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A very important detail which you failed to include in your question is that you expected the price to rise linearly with the more expensive ingredients.

So you're suggesting that a gluten-free pie should cost £13 instead of £14, correct?

Alice is not profiteering, she's made a calculated price adjustment which reflects the total cost for her business to provide a gluten-free product: sourcing, storing, prepping, cooking, and training all come at an additional cost. If customers don't want to make their own gluten-free pies then what obligation does Alice have to provide them at-cost?

Profiteering or even price-gouging would be if Alice was selling the pies for £30, £40, or £50. However, even that is not likely to get her into any real trouble aside from ire from gluten-free customers.

Yes, she has expensive pies; don't buy them if you cannot afford them. It would be different if she already committed to making you a pie at one price and charged double when you came to pick it up.

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Anti-profiteering laws provide circumstances under which you can not increase your prices, but they do not prevent you from setting high prices in advance of those circumstances. For example, if you sell bottled water for 20$ a case normally, and just before a hurricane hits, you hike your prices up to 80$ a case, then you are guilty of profiteering.

However, if you were already selling water under normal circumstances at 80$ a case, and a hurricane hits, you are under no legal obligation to drop rates to meet market expectations. Maybe it's sourced or processed in a way that makes that brand more expensive, maybe you do business in a really rich neighborhood where people don't mind paying 80$ a case normally, the reason does not really matter as long as it is the normal price you charge for that particular product.

So how this applies to you example (under US law) is that you are allowed to sell your gluten free pies at what ever price you wish. They could be 100$ a pie and it would not matter. However, your legal situation would get messy if you normally sell them for 14$ a pie, and then learning that a bus full of refugees with food allergies just pulled into your parking lot, hike the price up to 100$ a pie in anticipation of the sudden supply shortage.

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