Teppanyaki chain Benihana sues Bama Sea alleging shrimp shortage

Florida-based teppanyaki chain Benihana Restaurant is suing Bama Sea Products, for damages stemming from an alleged breach of a $5.2 million shrimp supply contract, documents show.

The Miami-headquartered restaurant chain, which has 99 teppanyaki and sushi locations, accuses St. Petersburg-based Bama of providing it with smaller vannamei shrimp than the parties previously agreed to.

Vannamei from Thailand. Photo: Stan Dalone & Miran Rijavec

According to a copy of the lawsuit filed in Florida's Pinellas County court, Benihana inked a contract with Bama on Oct. 7, 2015 under which Bama would provide it with around 1.32 million pounds of 26/30 headless shell-on (HLSO) vannamei at $3.95 per pound FOB farmed in Ecuador and/or Peru. 

Those prices and amounts, subject to a 10% plus or minus variation in supply, valued the contract at $5.2m.

The original contract was supposed to take effect on Jan. 1, 2016 and run through the year but a shortage of the larger shrimp prompted changes to the contract, the lawsuit states. Instead of 26/30 HLSO the parties agreed on Feb. 29 to modify the contract allowing Bama to supply 31/35 HLSO from April 1 to July 31. 

That measure was to allow Bama "an opportunity to locate alternative sources for the 26/30 shrimp," according to the lawsuit. The temporary modification called for Bama to source 440,000 lbs of 31/35 HLSO shrimp for the chain at $3.78/lb FOB. 

But according to Benihana, that temporary modification ended on July 31 once again requiring Bama to supply the larger shrimp. 

A second modification of the original contract, agreed for Bama to continuing to supply Benihana with the 31/35 HLSO shrimp on a "case by case" basis for $3.78/lb FOB, an arrangement that lasted for "a few weeks," the lawsuit states.

"Following the expiration of the temporary modification, and once Benihana and Bama could not agree on any further temporary accommodations, Bama failed to provide Benihana with the 26/30 shrimp at the fixed price per pound of $3.95, FOB as provided in the original agreement," the suit states.

For its part Bama Sea disputed Benihana's characterization of the matter.

"Bama Sea Products disputes Benihana's claim that we are contractually obligated to supply them with shrimp. We will appropriately respond to their complaint in due course," the company wrote in a statement to Undercurrent News.