The suspects allegedly used waste oil from the fat of chickens, ducks, pigs, cattle and foxes, as well as fox fur, chicken feathers, and "leftover pieces of offal and poultry", the China Daily said.
It is the latest case to highlight poor food safety standards in China, a growing source of anger for many.
The China Daily said it was the biggest case since the country streamlined its laws to target such practices in May, and quoted food safety experts saying the oil could destroy the digestive tract.
The group went on trial yesterday in Lianyungang, in the eastern province of Jiangsu, it added.
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Health authorities in China last year launched a crackdown on "gutter oil", which normally refers to cooking oil illegally made by reprocessing waste oil or by dredging up leftovers from restaurants and marketing it as new.
More than 100 people were arrested and 20 imprisoned -- two of them for life -- as part of the campaign.
Poor food safety standards are a major concern in China, particularly among the less affluent who cannot buy imported products.