We investigate the effect on survival and coexistence of introducing forest fire epidemics to a certain two-species competition model. The model is an extension of the one introduced by Durrett and Remenik (Ann. Appl. Probab. 19 (2009) 1656–1685), who studied a discrete time particle system running on a random 3-regular graph where occupied sites grow until they become sufficiently dense so that an epidemic wipes out large clusters. In our extension we let two species affected by independent epidemics compete for space, and we allow the epidemic to attack not only giant clusters, but also clusters of smaller order. Our main results show that there are explicit parameter regions where either one species dominates or there is coexistence; this contrasts with the behavior of the model without epidemics, where the fitter species always dominates. We also discuss the survival and extinction regimes for the model with a single species. In both cases we prove convergence to explicit dynamical systems; simulations suggest that their orbits present chaotic behavior.