Police in Italy have arrested 33 people suspected of involvement in trading counterfeit olive oil.

Carabinieri also seized assets worth €40m (around $43m) in the operation, which targeted members of the 'Ndràngheta criminal network, which is centred on the Calabria region of Italy, according to the Investigative Reporting Project Italy (IRPI). News of the arrests first emerged in the Italian press towards the end of last month.

Prosecutors maintain that the gang imported cheap and low quality olive pomace oil – the leftover oil squeezed out of pulp after the first and second presses – and mis-labeled it as extra virgin oil. The counterfeit oil entered the supply chain in Milan and was sold on to retail chains in the US, including outlets in New York, Boston and Chicago, according to the report.

The finger has been pointed at the Piromalli clan, said to have a grip on the Calabrian port town of Gioia Tauro and its surrounding agricultural land. The IRPI says farmers were either voluntarily cooperating or were coerced or intimidated into working for the group.

Counterfeiting and fraud is a big problem for the $16bn-a-year olive oil industry, with some studies claiming that between 60 and 90 per cent of olive oils sold in the US are adulterated with cheaper pomace oil or oils from other plant species such as sunflower, canola and peanut. Over three million tons annually of olive oil are produced worldwide, with around 75 per cent of this being produced in Italy, Spain and Greece.

Last year, vegetable oils – and mostly olive oil – topped the ranking of illicit food products discovered in Europol and Interpol's Opson V enforcement operation. High-quality edible oils such as extra virgin olive oils tend to be expensive, and thus prone to adulteration.The problem is only likely to get worse, as poor harvests in southern Europe are expected to push retail prices up by as much as 20 per cent this year.

The legitimate industry has tried to fight back with initiative such as using near-field communication (NFC) tags and mobile apps to allow customers to authenticate purchases, as well as improved analytical techniques that allow oils to be tested for adulteration such as nuclear magnetic resonance (NMR) profiling and chemical fingerprinting.