Four out of five bottles of extra-virgin "Italian" olive oil are actually blended with foreign oil in a five-billion euro ($6.5-billion) a year business, according to La Repubblica daily.
Cheap olive oil from Greece, Spain, Morocco and Tunisia is mixed with more expensive Italian oil in a highly opaque business that is the subject of an ongoing investigation by customs authorities and tax police, the report said.
"There is a powerful group in the food business that is making illegal fortunes on the import and absence of traceability for olive oil blends," Stefano Masini of the farming group Coldiretti was quoted as saying.
"The time has come to talk about an 'agri-mafia' for olive oil," he said.
The report pointed out that one of the problems for investigators was that the producers and exporters of the foreign olive oil were often subsidiaries of the same companies that import the oil to Italy and sell it.
"They control the prices, they control the market. Once upon a time these famous Italian companies pressed olives: now they have silos," it said.
La Repubblica said the foreign olive oil is bought for as little as 20 euro cents (26 US cents) per kilo and then sold for as much as 4.0 euros a kilo.
The labels about blends that legally have to be put on the bottles sold in Italy or exported are often misleading or illegible, the report added.