France Approves Private Auction Sales

ArtInfo reports on a new French law which will allow French auction houses to engage in private sales.  This new law brings France into line with other major European Union countries.  Althought there were ways around the previous restrictions on auction houses conducting private sales, private sales was the primary domain of galleries and dealers.  The French dealers and gallerists of course opposed the new law, and possbily stand to suffer from the large international contacts and placement abilities of the major auction houses.

ArtInfo reports (as the article is brief, I took the liberty to post the full content).

A new law liberalizing auction house sales has just been adopted by the French parliament. Proposed by the Senate in 2009, the law will allow auction houses to conduct sales by mutual agreement, i.e., private sales between the seller and buyer. Previously such transactions were restricted in France to galleries and other private dealers.

Predictably, the bill found formidable opposition from those who will see their market share decrease — dealers and gallerists — and was the object of heavy lobbying from those who will gain, that is, auction houses such as Sotheby's, Christie's, and Artcurial. The law brings France into line with other European countries and England, which already allow auction houses to handle private sales. France's share of the auction market has been declining, and the French government said that the new law will "stimulate the French market," according to Europe1. "Instead of sending artworks to London where these private sales were already permitted, from now on we'll be able to handle them in Paris," François de Ricqlès, president of Christie's France, told Les Echos.

Previously, auction houses had various ways of working around their inability to conduct private sales. Guillaume Cerruti, head of Sotheby's France, told Les Echos of having to send "Le Cercle de la Rue Royale," a painting by James Tissot, to Sotheby's Monaco in order to sell it for almost €4 million ($5.7 million) to the Musée d'Orsay, since it would have been illegal to do so in France. Cerruti added that the new law will not benefit auction houses alone, since "these sales will be included in the profits posted by Sotheby's France, which will create additional tax revenues for the French state."

Auction houses could also conduct private sales through holding companies, which was the practice at Artcurial. Private sales represent five percent of Artcurial's sales, 10 percent at Christie's France, and 20 percent at Sotheby's France. "It's developing, because we have a huge client base, but it's mostly in cases of rare objects," Christie's president Ricqlès told Les Echos.

Since they are fast and secure, private sales have special appeal for clients seeking privacy. Museums, which often must establish a budget in consultation with their boards, often lack flexibility during auctions and prefer private negotiations.

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