Italy has the highest level of film piracy in the western world, according to industry publication Screen Daily.
Film piracy in Italy is reported to be a £172m industry
The country's anti-piracy watchdog FAPAV said the black market for videos and DVDs was worth about 30% of the total market, the magazine reported.
Aurelio De Laurentiis of Italy's national producers' union said he had been warned off chasing pirates.
"I got a phone call from two judges who told me I'd probably be killed by the mafia," he told Screen Daily.
"In reality, the problem is still vastly undervalued," he said.
"The problem has always been underestimated in Italy. I first started chasing pirate copies of films 12 years ago."
Legal DVD and video sales fetched 417m euros (£286m) in 2003 - but pirate films worth 250m euros (£172m) were sold, according to FAPAV.
The watchdog said police carried out 145 raids in Italy last year and seized 334,875 illegal DVDs.
But around four million pirate DVDs are thought to be currently circulating the country.