What You Need To Know About Lithuania's 'Cauliflower Revolution'

A Facebook Inc FB post might have triggered a crisis in Lithuania.

On March 31, Lithuanian woman, Ruta, bought a cauliflower head in her town of Vilkaviškis. When she arrived at the cashier, the clerk told her the product in question was 3.49 euros ($3.92). Outraged, the woman posted her receipt on her Facebook page and, within a few hours, thousands of fellow citizens had shared the story.

Suddenly, food prices were the most popular topic in social media. This led to a three-day boycott to the main supermarkets in Lithuania — to which milk farmers joined, distributing free dairy products in Vilnius as a way to prove the supermarkets’ price gauging practices.

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According to several analysts, food prices have experienced substantial inflation since Lithuania adopted the euro in January 2015. In fact, some products have even tripled in price.

The Exodus

The “Cauliflower Revolution,” as media has dubbed it, has led to a sort of exodus of Lithuanian consumers toward Poland. It has been reported that a large number of Lithuanians are now doing their shopping in neighboring Poland, where the value-added tax (or VAT) stands between 3 and 8 percent depending on the product, versus Lithuania’s 21 percent.

Prime Minister Algirdas Butkevičius recently assured that the price spikes were not caused by the euro, but by the fact that many products are imported and, thus, their prices are subject to other factors like bad harvests. Swedbank’s Nerijus Mačiulis backed the PM, explaining that a seasonal increase in demand was the reason behind the marked surge in cauliflower prices, noting that price-tags are even higher in the United States, Canada and New Zealand.

Despite these arguments, protests seem to have been effective in hurting supermarkets, as some of the chains have already introduced big discounts to many products.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.