Heat oil in a large saucepan over low heat. Cook garlic until fragrant, about 2 minutes. Add sherry, cook and stir briefly. Add bacon; cook and stir until lightly browned, about 5 minutes. Add tomato puree, chicken stock, and sweet peppers. Cook and stir sauce until flavors are combined, about 3 minutes.

Heat a skillet over medium-high heat. Add beef, chili powder, and steak seasoning. Cook and stir until browned and crumbly, 5 to 7 minutes. Stir in honey, jalapeno juice, cilantro, cayenne pepper, basil, and paprika. Transfer mixture to the pan of sauce.

Place chicken in a skillet. Cook and stir over medium heat until no longer pink in the center, 5 to 8 minutes. Add chicken to the sauce. Simmer on low, stirring occasionally, until flavors meld, 2 to 2 1/2 hours.