Sales of alcoholic drinks dropped 32 percent in the two years between June 2009 and June 2011, largely because of the successive increases in taxes, industry leaders estimate.

In northern Greece, the fall has been around 50 percent because of abundant imports from neighboring Bulgaria. The loss of customs revenue from the growth of smuggling is estimated at around 100 million euros.

The cumulative 87 percent hike in the special consumption tax on alcoholic spirits in the last two years has brought it to 7.14 euros per bottle -- while other alcoholic drinks, such beer and wine, are taxed much more lightly, Tasos Evangelou, head of Diageo Hellas & Guinness Continental Europe, told an Economist conference in Athens Monday.

According to the European Spirits Organization, this Greek tax is now the fifth highest in Europe, behind Sweden, Finland, Ireland and the UK.

The drop in consumption and revenue has resulted in a 64 percent reduction in advertising and a 20 percent reduction in employment in the sector.

“Companies now hesitate to invest in Greece but go to Turkey,” Evangelou said. Diageo decided to invest $2.1 billion in the neighboring county six months ago, he said.