British art market warns against EU levy

LONDON, July 1 (BestGrowthStock) – British auction houses fear that
an EU levy on works of art by the likes of Pablo Picasso and
Henri Matisse, due to be introduced in 2012, could undermine
their position as world leaders in the field.

The British government has a temporary exemption from the
EU’s “droit de suite” levy on the re-sale price of works of art
payable to the artist or the artist’s inheritors for 70 years
after his or her death.

Extending the artists’ resale right beyond living artists to
those who have died in the last 70 years would increase the
number of sales liable to the levy by four times, according to
estimates from the British Art Market Federation.

Considering nearly 40 percent of the 7.7 billion pound
annual British art market is accounted for by modern and
contemporary art, the levy would “irreparably damage” the
sector, the federation added.

“Art dealers and auctioneers in Switzerland, New York and
Hong Kong must be rubbing their hands with glee at the prospect
of the London art market having one hand tied behind its back
after January 2012,” said federation chairman Anthony Browne.

Britain is second only to the United States in the
international art market, accounting for 29 percent of global
sales. Last year the sector generated 7.7 billion pounds ($11.50
billion) and 911 million pounds in tax revenues.

The United States is the world’s biggest art market, but of
particular concern to British dealers is the rapid growth of the
art market in China, which could take much of the business lost
to London should the levy be imposed.

“The strength of global competition is demonstrated by the
rapid rise of China, which has come from nowhere to be the third
largest art market with a 14 percent global share within a
decade,” the federation said.

It added that the EU had so far failed to enter into
negotiations on how to amend the levy globally, thereby creating
equal conditions for all.

Jussi Pylkkanen, president of the European arm of
Christie’s, the world’s biggest auction house, said it would be
harder to assemble major sales of modern and contemporary art in
London should the levy come into force.

“This could well damage the UK’s position as a global art
centre, with predictable effects on revenues and employment here
in the UK,” he said in a statement.

The world record for works of art sold at auction has been
broken twice this year, both times by artists who have died
within the last 70 years.

Alberto Giacometti’s bronze statue “Walking Man I” sold for
$104.3 million in London at Sotheby’s in February, while
Picasso’s “Nude, Green Leaves and Bust” fetched $106.5 million
at Christie’s in May, although that was in New York.
(Reporting by Mike Collett-White, editing by Paul Casciato)

British art market warns against EU levy