Tencent vs Lao Gan Ma: Why is the Chinese Tech Giant Suing the Country’s Favorite Chili Sauce?

It’s been an object of affection for John Cena, caused a stir at New York Fashion Week, and been an indispensable part of mealtimes around the world. Now, Chinese chili sauce Lao Gan Ma is in the midst of a legal tussle with one of the country’s biggest tech companies, Tencent. So what’s going on?

News broke on Monday that a Chinese court had frozen Lao Gan Ma assets worth 16.24 million RMB (2.3 million USD) following an unspecified complaint filed by Tencent. The court’s public statement on the matter referred only to vague “contract disputes.”

The story was initially met with confusion and plenty of jokes on Chinese social media. Some users suggested that Tencent staff may have endured a mass case of diarrhoea to prompt the action, while others wondered whether the tech giant had simply decided that Lao Gan Ma’s new recipe wasn’t as good as the original.

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Perhaps unsurprisingly, the truth appears to be a little more banal. Tencent apparently told state media tabloid Global Times that the sauce-maker owed them unpaid advertising fees dating back “a long time.” Things heated up when Lao Gan Ma, for their part, issued a statement to claim that they had had “no commercial cooperation with Tencent.”

Update: This tale has taken a spicy new turn — the latest reports now say that Tencent has been duped by a trio masquerading as Lao Gan Ma representatives. Guizhou police released a statement Wednesday in which they clarified that three people had been detained following a preliminary investigation that found the group had forged the Lao Gan Ma company chop (used for authorizing legal documents).

The fake deal led to “Lao Gan Ma” seemingly sponsoring a Tencent computer game, with characters appearing in branded outfits and jars of the chili sauce being featured in shot in video coverage of related gaming events.

Rumors online have suggested that a Tencent employee fell for the phishing scam after coming across it on Baidu, something that the Chinese search company was quick to dismiss (via a memefied post on Weibo).

Tencent, presumably feeling more than a little foolish, have now encouraged netizens to come forward with any similar leads or clues. The reward for such information? 1,000 jars of Lao Gan Ma chili sauce.