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Huy Fong Foods Fired Up Over Alleged Breach Of Contract

It may be time to stock up on Sriracha.

Huy Fong Foods, the Irwindale-based company who has gained a cult-like following due to the popularity based around their Sriracha sauce, has filed a lawsuit against Camarillo based chili pepper producer Underwood Ranches.

In the late 80's, Owner of Underwood Ranches, Craig Underwood, reached out to Huy Fong's CEO David Tran and proposed providing Huy Fong with their jalapeño peppers for their hot sauces. Tran, whose business at the time was still in the early stages, accepted, and the rest is history. Since then, as Huy Fong has seen massive growth, all while Underwood Ranches has continued to be their go-to provider for chili peppers.

On Tuesday, Huy Fong moved forward with a lawsuit against Underwood Ranches, alleging they are refusing to pay over $1.4 million in overpayments in addition to alleging Underwood Ranches is refusing to return over $7 million of Huy Fong's equipment.

From 2008 until 2016, Huy Fong paid more than $190 million to Underwood and made "substantial" annual pre-payments to Underwood Ranches beginning in February of each year, the suit states. The plaintiffs always paid any balance owed Underwood up until 2016, when Huy Fong overpaid the producers by $1.4 million, according to the suit.

The two sides were unable to reach an agreement this year, when Underwood was holding more than $7 million worth of equipment bought by Huy Fong, the suit says.

Huy Fong also has demanded return of its $1.4 million overpayment in 2016, but the defendants have refused to do so, according to the suit.

We speak for millions when saying we hope this is resolved as quickly and amicably as possible, as we really hope this lawsuit doesn’t result in a Sriracha shortage. To play it safe, you should probably go to your local grocery store and buy all the Sriracha you can find. Just in case.

Source: NBC LOS ANGELES