The California city of Irwindale, outside Los Angeles, has taken legal action against Sriracha maker Huy Fong Food's facility, after neighbors complained about strong odors.
On Thursday a judge could order the factory to stop production, in what would threaten next year's supplies of Chili Garlic, Sambal Oelek, and the wildly popular Sriracha "rooster" sauce, according to the Los Angeles Times.
Neighbors also complained about burning eyes and throats from the factory.
The chilis for next year's sauce supplies are all processed in a three-month time period that is just at its peak, after the peppers were harvested and ground within a single day to maintain their fresh taste, the Times said.
But company owner David Tran said air filters already prevent odors escaping as much as is physically possible -- and he also alleged that some of the complainants do not actually live next to the facility, but further away.
"To filter 100 percent, I haven't found any engineer (who) can do it," the Vietnam-born businessman told local radio station KPCC, adding that the best that can be achieved is stopping 90 percent of smells from escaping.
"The neighbor complained to us. We thought that, no, the punch of the chili won't (reach) 1,500 feet away. I don't buy it," he added.
On Thursday, a judge will rule on the city's request for a temporary restraining order. It has also asked for a permanent injunction, which, if granted, would stop production until the factory can remedy the odor problem.
Sriracha sauce, of which Huy Fong Foods is the biggest producer in the United States, takes its name from the town of Si Racha in Thailand, where the hot sauce was first produced.