July 2011 newsletter
There has been a major development in the antiques world since I last wrote to you. There are three British multinational auction houses, Christie’s, Sotheby’s and Bonham’s. Back in the 1970s, the finance directors of the first two, realised that in the great market boom that then existed, buyers were keener to buy than sellers were to sell. So they hatched the ingenious plan to levy a premium on the buyers, while reducing the commission they charged sellers. It was a commercial masterstroke, netting the companies £millions over the years. There was uproar among antiques dealers, but as a disparate group of individualists, they were unable to agree to withhold their bidding, and the auctioneers stole a huge march on what had previously been a cosy symbiotic relationship.
Over the years, the auctioneers consolidated their hold over the market , by using their massively increased revenue stream to fund blanket advertising and marketing, and then increased both their sellers’ commission rates and the buyers’ premium, which started at 10% and until recently was 20% (Bonham’s) - 25% (Christie’s and Sotheby’s). At the very high end, rates decrease, but they do not kick in below £25,000, and the best rates only apply over £500,000.
In early June, Bonham’s chairman, Robert Brooks announced that "to maintain our competitiveness..... with Sotheby’s and Christie’s, we are raising our buyers’ premium to 25%". I think it is the first time I have heard that raising your prices to match your rivals’ was competitive! In fact the buyers’ charges are 30%, because VAT is added to the premium, which means that if you bid £400, you will actually have to pay £520. Somehow, if you multiply those figures by 10 it looks even more daunting. Of course, the auctioneer also receives a seller’s commission of 15% or thereabouts, added to which is compulsory insurance, and possible photographic and other charges. So if a buyer pays any of the ‘big three’ auctioneers £520, the seller will receive £324 at the most, and often less than £300. Looked at another way, in all but the most expensive lots, for each £100 a vendor receives, the auctioneer will take at least £61.15.
Auctioneers provide a service to vendors - cataloguing, advertising and offering vendors’ chattels for sale in an auction room. That is a straightforward service for which a charge is, and should be expected. However, I have often asked what ‘service’ auctioneers provide for the even larger charge they make to buyers, but I have never had a satisfactory response. Surely, acting as the only agency between two parties with conflicting interests runs contrary to accepted business ethics; imagine a solicitor acting for, and taking payment from, both a husband and wife in a divorce. I have to ask why our law-makers have not taken a serious look into this practice - maybe we should all ask our respective MPs to do so! And perhaps those outside the UK should apply similar pressure to their politicians.
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Now the good news! For some years, we have banked at Harrods, and found excellent service. In particular, our manager has discretionary power to make executive decisions, and being able to have a pleasant dialogue with your personal manager is a rare thing these days. Harrods Bank is not a large organisation, and is kept at ‘arm’s length’ from the department store. Twice a year, they produce a very superior (well it would be, wouldn’t it?) newsletter, and this month Butler’s Antiques features prominently. If any reader would like to see a copy, please do ask me; I have a few to give away.
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Silver wine labels have long been collected, and the Wine Label Circle celebrates its 60th anniversary next year. Formerly called bottle tickets, their appeal is broad in its scope. Their small size makes them easily manageable, and there is a wide variety of designs and aspects of appeal. Some collectors specialise in labels made in the provinces, or in Scotland, while others collect those in Sheffield plate, or mother-of-pearl, but some of the most sought are those with mis-spelt names, while rare wine names are even more keenly contested. Find a mis-spelt wine label for Constantia, made in Inverness, and large sums of money would be the order of the day! Somehow, I am not sure if all these categories merit their status within the collecting fraternity, as there is one category which does not seem to rate highly for its own sake - labels of high quality and in fine condition. Obviously if a finely crafted label for a rare name, or a mis-spelt one comes to the market, it will sell for more than a poor specimen, but high quality per se seems not to be a prime criterion in collectors’ eyes. I knew one collector who bucked this trend, but he is no longer with us, and his collection was dispersed.
While I have several wine labels of high quality, I have just bought one which was clearly made by someone who was ignorant both of wine and his sense of direction. Many restaurants have Muscat de Frontignan on their lists, because it is a relatively inexpensive sweet wine - not everyone wants to afford fine Sauternes. In the 18th and 19th centuries, Frontignan was known as Frontignac, but the man who made the label in front of me pierced the name as Fontaniac. Not only that, he did it upside-down with the loops from which to suspend it on the bottom edge! It certainly is a rarity, and I hope a collector will jump at the opportunity to add it to his or her collection.