By Umberto Bacchi
ROME, Feb 21 (Thomson Reuters Foundation) - Italian police said they have busted a crime ring exporting fake extra virgin olive oil to the United States, highlighting the mafia's infiltration of Italy's famed agriculture and food business.
Twelve people with links to the 'Ndrangheta, the organised crime group based in the southern Calabria region, were arrested on Tuesday on a series of charges including mafia association and fraud, police said in a statement.
The gang shipped cheap olive pomace oil to the U.S. where it was re-labelled as the more expensive "extra virgin" variety, prized for its rich taste and health benefits, and distributed as such to retail stores in New Jersey, they said.
Italian crime syndicates earned an estimated 16 billion euros ($16.85 billion) in 2015 through illegal activities in the agriculture sector, up from 15 billions in 2014, according to Italy's agricultural association, Coldiretti.
Besides counterfeiting products, gangs make money seizing control of farmland and firms, fixing prices, controlling distribution and through labour exploitation, studies say.
In 2015, crime groups forced more than 100,000 Italians and migrants to work long hours for little pay in fields across the country, according to a report by Italian General Confederation of Labour union (CGIL).
Police said they found no evidence of labour exploitation linked to the fake olive oil scheme, which saw at least ten tonnes of low quality oil, in some cases past sell-by date, sent to the United States.
Pomace oil is extracted from olive pulp left-over from the production of higher quality oils using chemical solvents.
It costs about a tenth of the Italian made extra virgin variety, which sells at about 10 euro a litre, according to David Granieri, the head of Italian olive growers' association UNAPROL.
Granieri said counterfeit food products posed health risks, as they might contain allergens not indicated on the label, and damaged the reputation of Italian delicacies.
Honest producers, who rely on a perception of luxury to sell at higher prices aboard, also suffered from cheap fake products at a time of low oil production, he added.
"They (the crime groups) are drugging the system," he told the Thomson Reuters Foundation by phone.
Police said they had been in touch with U.S. authorities on the case.
Italy has long struggled against counterfeiting of its prized culinary goods, and police estimate the domestic market for fake foodstuffs is worth around 1 billion euros ($1.1 billion) a year.
($1 = 0.9494 euros)
(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Ros Russell.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)
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