What Does Sriracha-geddon Say About California's Business Climate?

Perhaps Huy Fong officials will seek out locations that don’t subject them to lawsuits and costly production stoppages.

SACRAMENTO -- The Internet is abuzz with cracks about the “Sriracha apocalypse,” as foodies prepare to survive without the popular hot sauce after state health officials directed Sriracha’s maker to halt production for 30 days. But this is no laughing matter to the owners, employees, distributors, and suppliers who depend on the business.

The dispute has become a nationwide story—the latest example, perhaps, of the way California governments treat entrepreneurs. Huy Fong Foods has been partially shut down not only by the California Department of Public Health, but by a judge after the San Gabriel Valley city of Irwindale filed a lawsuit complaining about the plant’s spicy odors.

The state health department says it reviewed the company’s manufacturing process—it involves mashing fresh ingredients rather than cooking them—and decided that the product should be held for 30 days before distributing it to ensure there are no problems with microorganisms. There are no actual problems with the sauces. It is solely a regulatory issue, according to the company.

Health officials confirm as much: “While our safety concerns are minimal and don’t warrant a recall, we believe that given Huy Fong’s new method of manufacturing, the safest course of action is for them to hold it for 30 days in the same way many other food manufacturers do, consistent with federal food regulations,” said department spokeswoman Anita Gore, in a statement.

The company was founded by David Tran, who fled Vietnam in 1979, borrowed $50,000 and began distributing sauces out of his van. It has turned into an international phenomenon— the winner of praise from gourmet magazines, the subject of a documentary, and now a potato-chip flavor. It’s reportedly a $60-million-a-year business.

Problems started after Huy Fong Foods was lured out of its older Rosemead facility into a $40-million plant on 23 acres in Irwindale. The city financed the plant with an interest-only loan as it sought tax-generating businesses. But some residents claimed that the plant caused them health problems including nosebleeds and heartburn.

In November, a judge ordered the company to halt any odor-causing operations even though, as the Los Angeles Times reported, he found a “’lack of credible evidence’ linking the stated health problems to the odor, but said that the odor appears to be ‘extremely annoying, irritating and offensive to the senses warranting consideration as a public nuisance.’”

I haven’t been near the plant, but have lived near a Midwestern refinery. Smells can be irritating, but they are part of the deal if a community seeks a manufacturing base. If a processing plant cannot operate in an industrial area such as Irwindale—known for its speedway, gravel pits and MillerCoors brewery—where can it operate?

It’s ironic that the city would at one point help a facility and then punish it for doing what it is supposed to do. If one lives by city deals, one can die by them, too, given that political priorities change. As the city’s Web site explains, it has embraced “a new vision as the city begins the early stages of transitioning from a mining town to a more suburban, metropolitan community.” Emerging suburbs have less tolerance for smells. But there may be other explanations for the state’s actions.

“California has a large tax load that in turn funds a large administrative state that has to be busy,” notes former California Assemblyman Chuck DeVore, now vice president at the conservative Texas Public Policy Foundation in Austin. He has authored a forthcoming study showing that California employs far more regulators than most other states.

But perhaps Huy Fong officials will solve the problem by seeking out locations that don’t subject them to lawsuits and costly production stoppages. A spokeswoman for Texas Gov. Rick Perry’s office confirmed that it has “reached out” to Huy Fong Foods. The company has also been contacted by an official in Pennsylvania. There’s an old economic saying that you get more of what you subsidize and less of what you punish. That doesn’t apply only to the production of hot sauces.

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  • UnCivilServant||

    I'm torn, because on one hand capsaicin is a chemical developed by plants to kill mammals, so there is the possiblity of an irritant escaping the facility. However, the city knew what they were asking for when they floated their cronyist deal.

    Screw it, move out of california already!

  • John||

    There is a whole common law nuisance law system to deal with this. Assuming the town didn't agree to the smell or move there after the smell was already there, then let them sue and let the company pay for the damage.

  • VG Zaytsev||

    The claimaints in the suit presented no, as in zero, evidence of any damages. A fact noted by the judge that issued the restraining order. So why the fuck wasn't the case summarily dismissed?

    because THIS IS CALIFORNIA

  • John||

    But it made the landowners feel bad and that is enough. Pathetic.

  • VG Zaytsev||

    But it made the landowners feel bad and that is enough. Pathetic.

    AFAIK the plaintiffs weren't homeowners.
    The nearest homes to the factory are miles away, it's in a longtime industrial area.

    My best guess is that someone tried shaking them down for money, either a regulator or politician, who they told to fuck off. So the shakedowner sicced the regulators on them.

  • Heroic Mulatto||

    I read some of the alligations, and they seem like bullshit. Unless you believe the factory is producing sentient clouds of irritants that were hunting down individual families and terrorizing them.

  • Heroic Mulatto||

    I read some of the allegations, as well.

  • JWatts||

    Are alligations prehistoric predatory reptillian type accusations?

    If so, I declare your new word, alligations, to be the internet word of the day.

  • JWatts||

    Are alligations prehistoric predatory reptillian type accusations?

    If so, I declare your new word, alligations, to be the internet word of the day.

  • OneOut||

    But have you read some of the same allegations as Heroic Mulatto did at 12:27PM ?

  • OneOut||

    Bingo

  • SQRLSY One||

    Danganabations, now, y’all has Yers Truly cryin’ Crocodyle tears now about all of that them thar Alligated Alligations of neefarious low-lyin’ Leptilian lihzzards-in-the-pond-scumm low-brow swamp-dwellin’ critters, all of them thar bahstahds lustin’ ta take a chomp outta mah BUTT… Makes meh think of that them thar GuvMint types, it does…

  • SQRLSY One||

    Speaking of alligations of certain Lheptillians being stupid beasts, please see http://www.cracked.com/article.....-good.html and scroll on down to #3… Any of y’all up ta goin’ Down Under w/me to go and whack some crocs on the heads with sticks and gather up their eggs?!?! See Ya Later, Allege-Gators!!!!

  • VG Zaytsev||

    Regulator: You threaten my people with employment and products.

    Businessman: This is madness.

    Regulator: This is CALIFORNIA

  • Res ipsa loquitur||

    The Constitution isn't a suicide pact !!!!!!!1111

  • ||

    Move to Denton already!

  • pan fried wylie||

    a chemical developed by plants to kill mammals

    The LD50 in mice is 47.2 mg/kg

    Kill?

  • anomdebus||

    capsaicin is a chemical developed by plants to kill mammals


    Source please? I accept that it is designed to discourage animals from chewing the seeds, but I haven't heard anything about peppers being lethal to animals.

  • pan fried wylie||

    that's why I looked up the LD50.

    You would have to eat bushels of peppers despite the agony for them to be lethal. Hell, you'd have to eat a few teaspoons of pure capsaicin.

    /pepperpedant

  • anomdebus||

    Appreciated, though I just didn't see your comment before I posted.

  • OneOut||

    Some mammals don't even register capsaicin at all with their taste buds.

    Birds for sure, I don't know about any others.

  • gaoxiaen||

    Just love those jalapenoes. They don't kill me, but an "overdose" really makes me dread my morning dump.

  • OneOut||

    Come on, ice cream !

    Cheech and Chong

  • PaulW||

    I always thought that it was an insect deterrent, not a mammal deterrent.

    Birds and mammals eat seeds, then poop them out far away. Symbiotic relationship. We get food, plants get to spread their seed.

  • John||

    None of the billionaire and millionaire fucks in Silicon Valley and Hollywood who run California will give a rats ass about the people who lose their jobs if the plant moves or about consumers who like the stuff if the company is forced to put out an inferior product.

    So at this point the company better start looking for land to build a new plant in Texas because California isn't going to change.

  • VG Zaytsev||

    That's exactly right.

    Those fuckers care alot more about eco fantasies and scoring political points against strawmen than the stinky proles that infest their state.

  • Sevo||

    "Billionaire to push Calif. lawmakers for oil tax"
    http://www.sfgate.com/default/.....069103.php
    Too many people in CA have jobs, dammit!

  • Curtisls87||

    "State Sen. Noreen Evans, D-Santa Rosa, already has pending legislation that would impose a 9.5 percent per-barrel tax on oil, but it stalled in a legislative committee this year.

    Her spokeswoman, Teala Schaff, said Evans hopes to find more support for the bill in 2014. But she noted that the current makeup of the Legislature includes more moderate Democrats who are loathe to oppose the business community, which has opposed such efforts.

    "We're giving away our natural resources for free to companies that make billions of dollars a day in profits," she said. "If the Legislature can't get it done, then hopefully the people will.""

    What a statist. "Our natural resources," indeed.

  • ||

    California's state government rakes in 72 cents in taxes per gallon of gasoline sold. The oil companies earn about 10 cents a gallon. The state is bringing in more than 7 times the money for not lifting a finger and yet Noreen believes it's not enough. DIAF, you fucking parasite.

  • Free Society||

    Remember when candidate Obama was harping on those "record profits" profits earned by oil companies? The Federal government alone earned 3 times as much from oil sales, as the oil companies.

  • ||

    I'd disagree with your use of "earned" in reference to the government, but yes.

  • OneOut||

    No sure what a 9.5% tax per barrel would do to the cost of gasoline at the pump, but it would of course go up.

    with oil, and then gasoline, being so high n Cali, what they need is some trains.

    Big, fast, super fast trains. New one with new rails to play with them on also.

    Many of the "high speed rail crowd" here in Houston have been making noise for years about the "need" for a high speed passenger rail line between Houston and Galveston Island, about 40 miles south, on the coast, of course. They tout the economic benefits of such passenger service. For some reason they forget there are already rail lines between the two that are used for freight to the port on a daily basis.

    I want to ask one of them if it's such a "need" why don't they buy their own train cars and test the market on the existing rail lines, but they don't respond.

  • PRX||

    I've got a brand new unopened bottle of it for sale.

  • EDG reppin' LBC||

    I bought four large bottles last weekend. Just in case.

  • gaoxiaen||

    My last bottle is sitting in the sink, empty. Oh, the humanity!

  • Edwin||

    This is a good place for Texas to step in. Houston already has tons of Southeast Asian immigrants, plus there's a lot more land to produce the fresh peppers Huy Fung needs (he moved his plant in part because he had trouble getting fresh peppers, and the problem still exists), not to mention a climate perfect for said peppers

  • Gray Ghost||

    This is a good place for Texas to step in. Houston already has tons of Southeast Asian immigrants, plus there's a lot more land to produce the fresh peppers Huy Fung needs...

    And it's not like Pasadena could smell any worse than it already does.

  • Ballz||

    Might be an improvement in Stinkadena. Besides, Texans like hot sauce on everything, why not their air.

  • OneOut||

    Many residents of Pasadena whose income comes directly from the plants call that the "smell of money", cough, cough , cough.

  • sarcasmic||

    Can always buy Roland's brand. They make a good sriracha.

  • some guy||

    FYI: Sriracha and Wasabit flavored candy canes are a thing. Good luck and Godspeed.

  • BakedPenguin||

    The Oatmeal on this.

  • Grammar Spelling||

    The part that gets me is the company having been invited to relocate and given tax incentives to do so by the local government and then that same said government turning around and making life miserable for the company they lured there in the first place.

    Anita GORE ... hmmmmmmm.

  • Chewbama||

    Lubbock.

  • widget||

    I suggest there might be more to this than meets the eye. Irwindale is a business fiefdom, like Vernon CA. There are not really any residents, just a carefully selected group of voters (population 1422). If the 'residents' are complaining about a business in Irwindale it probably means that business isn't playing the rules, if you know what I mean.

  • Sevo||

    'Nice little business you have there. Shame if something happened to it.'

  • JWatts||

    Next year's comment:

    Unemployed CA Resident 1: 'Where did that Nice little business go?'

    Unemployed CA Resident 2: 'Texas'.

  • pan fried wylie||

    NEW YORK CITY?!?!

    Oh, sorry, wrong thread.

    /mosies

  • andarm16||

    I have to say, that this story is the perfect example of why I would move to California. (That and the draconian gun laws)Unfortunately for the rest of us, one day the rest of the country be paying to bail out this mess (That is, if California doesn't manage to magically declare much of its outstanding debt null and void. I'd say it's a fifty fifty either way on what will happen).

  • andarm16||

    never move to California!

  • ||

    I was gonna say.

  • LarryA||

    Recent graduate: "Taking a job in California is like booking a cruise on Carnival."

  • ||

    "Smells can be irritating, but they are part of the deal if a community seeks a manufacturing base."

    Sorry this is not a libertarian argument, or even a good argument. If a manufacturing plant causes odors, dumps toxins into the atmosphere, poisons the water supply, etc, that is a violation of others' property rights. It's glib and inconsistent to just write it off as "a fact of life" as if the property rights of the plant's neighbors don't matter.

    Instead there should be a market-based solution to this, i.e. the manufacturer needs to enter a contract to pay its neighbors for poisoning them and/or degrading their quality of life. If such a contract cannot be negotiated, or if Sriracha can't afford the terms of the contract, then they should not be allowed to open the plant. Period.

  • Homple||

    A free market solution is to move the plant somewhere with fewer nitwit politicians and more sane citizens.

  • bassjoe||

    I'm not sure you can be considered "sane" if you're okay with factories dumping toxins into your water supply.

  • Dweebston||

    Thank God we have the EPA around to authorize factories to do that. A system of legally enforced property rights in which companies are enjoined from polluting rather than given quotas of permissible pollution would be... anarchy.

  • Death Rock and Skull||

    Smells, sights, and sounds are a fact of life, and should pretty much never be actionable under libertarian property law. Fuck you.

  • LarryA||

    Instead there should be a market-based solution to this, i.e. the manufacturer needs to enter a contract to pay its neighbors for poisoning them and/or degrading their quality of life.

    Or the manufacturer might enter into contracts to pay all its employees, who are also its neighbors, who will spend that money at the other businesses that employ the rest of its neighbors.

  • Pulseguy||

    What you are saying is smelling something that is being made in an industrial area miles from the nearest house is the same as poisoning a water supply.

    These are not equivalent.

    Life is a bit messy. There is nothing that can be done about this. Get over it.

    Where I live the noise by-law says if any noise you are making offends anyone in any way it is too loud. You're making the same point. Where I live the noise by-law is ignored by the police because nasty neighbors use it to harass the person who lives next door.

  • johnl||

    Has anyone driven by the plant?

  • Marc F Cheney||

    You know what? SRIRACHA ISN'T THAT GREAT.

  • ||

    Shut your whore mouth!

  • Quebst||

    Thank you for saying what needed to be said. Sriracha is the greatest thing since the wheel.

  • OneOut||

    blasphemy

  • andarm16||

    You know what the best part of this for the government is? If the company decides to move to a more friendly state (with or without government enticements), the same local officials get look sad while posing in front of the now shuttered factory, and lamenting how the greedy wreckers moved X jobs to (insert business / spicy food friendly state here)(with the stated implication that the wreckers that ran the factory only did it so they can exploit the poor self deluded Republicans that reside in that state).

    They win either way.

  • Adam.||

    What a bunch of pantswetting pussies; be downwind of an Archer Daniel Midlands plant sometime. You'll want to carve that nose right off your face but I don't see Iowa residents bitching.

  • Loki||

    When I was in high school we were about 20 miles or so from a paper mill. You haven't smelled stink until you've been downwind from a paper mill. There were days we were worried that a nearby sewer had exploded.

  • Spartacus||

    Somebody should tell California that Detroit is supposed to be a cautionary tale, not an aspirational model.

  • Response||

    It's sunny and 70deg in most of California - that's your tax dollars at work.

  • bassjoe||

    This is just happening to the Rooster sauce because we don't like hipsters...

  • Nixonfan||

    I thought manufacturing was illegal in California.

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