Major Australian Auction Houses Under Scrutiny

An interesting article on the status, level of competition and scrutiny of the major players in the Australian auction community. Paul Sumner of Mossgreen auctions states "I think everyone has been upset about what's going on," and I think people are just a bit tired of programs and stories that come out and paint a poor picture of the whole industry."

A very interesting read. The main question I have is, are the Australian issues pertinent to appraisers and auction houses here in the US. I would say, very possibly it is. The auction market is becoming more and more globalized due to internet bidding, the ease of catalog publishing and the access to national and international shipping.

In the very recent past the US auction industry has also dealt with issues of price fixing, poor management, etc. at both Sotheby's and Christies so this is not that unusual to hear. There are also many smaller auctions houses that have failed leaving consignors unpaid and without theri property. I am sure it does not surprise many professional appraisers who work with the large houses of more concerns, be it here or in Australia. If there are major issues with the large national and international houses in Australia, and depending upon the fall-out if any and any subsequent government actions, it could very well indirectly or directly impact the US auction market.

I highly recommend that you read the whole article. After reading, your comments would be greatly appreciated.


Picture Perfect Industry
Corrie Perkin, National arts writer, August 2nd, The Australian

AUSTRALIA'S art auction wars escalated to new heights of bitterness this week. For the past 18 months the seven main players - Sotheby's, Bonhams and Goodman, Deutscher and Hackett, Mossgreen, Joel Fine Art and Melbourne businessman Rod Menzies' two companies, Deutscher-Menzies and Lawson-Menzies - have been competing for market share.

But on Monday night a report by the ABC's Four Corners into the Australian art auction industry highlighted industry concerns regarding Menzies.

The day after the program went to air, lawyers acting for auctioneer Tim Goodman and other art auction identities lodged a complaint with the Australian Competition and Consumer Commission. It is understood the complaint relates to Menzies' company, Menzies Art Brands', alleged non-disclosure of guarantees and of the ownership of some artworks at its auctions.

The ACCC this week refused to discuss the complaint or whether an investigation would go ahead. If a case is brought against Menzies, it may allege a contravention of Section 52 of the Trade Practices Act. Menzies has indicated he will defend his position.

In its outline of "misleading or deceptive conduct", the 1974 act states that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Sydney-based Goodman, an auctioneer for 38 years, declines to speak specifically about the complaint, which was also signed by other unnamed auction house owners and directors.

"But I will say that the allegations in the media of false and misleading conduct by one auction house has brought to the attention of the market and the regulatory authorities the allegation that there has been bad practice," Goodman tells Inquirer. "That has brought a number of issues to a head."

Although he declines to elaborate, Goodman adds: "I believe very strongly that transparency is vital. And especially during uncertain economic times, it's vital we have transparency in the artmarket."

Goodman, Paul Sumner of Mossgreen, Sotheby's managing director Lesley Alway and Menzies' former executives Chris Deutscher and Damian Hackett are united in their view that art collectors deserve transparency when they buy at auction. The auctioneers are also discussing the formation of an industry body that would establish a code of conduct, as well as act as an education and advisory body for vendors, buyers, government and the art market generally.

Alway says Sotheby's, an international public company, has strict corporate guidelines. "But it's quite common to have an industry group and we would be interested in looking at such a body," she says. "But the issues to discuss are not necessarily connected to the current issues."

Self-regulation could be an alternative to government legislation, a prospect no one relishes because of the administrative layers it would inevitably involve. Meanwhile, art adviser Jon Dwyer, a former director of Christie's, says an industry body would be "a total waste of time", adding that the industry is too competitive for honest self-appraisal.

To read the rest of the article click HERE.