Millions of Dollars of Artworks Left U.K. Before Brexit Cutoff
Millions of Dollars of Artworks Left U.K. Before Brexit Cutoff
(Bloomberg) -- Among the thousands of trucks backed up in Dover last month trying to get across the Channel, one was carrying a painting by Henri Matisse. A piece by the Argentine-born artist Lucio Fontana was also in the queue, along with tens of millions of dollars of other artworks.
The owners wanted to get their art back to the continent before the U.K. left the European Union’s single market.
Before Dec. 31, European artworks could, like all other goods, move freely between the EU and the U.K. with minimal restrictions and without cumbersome tax and customs procedures. At the end of the Brexit transition period, galleries and collectors in London had to decide whether to stick with the U.K. or ship their works into the EU before the deadline. Several decided the latter was a better bet.
The risk for art dealers is that they could be hit by import duties when bringing works of art into the EU in future, according to Chris Evans, a general manager at shipping firm Cadogan Tate. In an interview, he said that mid-sized galleries and dealers who sell regularly to buyers in Europe have been particularly affected.
His company moved about 500 pieces for one client that has shifted about two-thirds of its stock into the EU. Another moved a quarter of its collection -- about $5 million of artworks -- and a third had moved smaller amounts earlier in the year.
Quantifying the total amount of art that was shipped out of the U.K. before the turn of the year isn’t straightforward because of a lack of data in a market that prides itself on privacy and secrecy. But anecdotal evidence backs up Evans’s impression that mid-sized operators and niche pockets of the market have been most affected.
The director of another specialist shipping company said that the volume of artworks it moved to the EU in December jumped 75% from the previous year. The firm, which he asked not to be identified due to the sensitive nature of its business, had 34 separate bookings last month as it trucked about 125 artworks to mainland Europe.
Each item is wrapped and packed in a special frame to protect it from bumps, changes in temperature, and humidity or dust. The most valuable and delicate paintings sometimes require custom-made cases or even temperature-controlled units.
The impact of the Brexit departures is likely only a ripple in a U.K. market that in 2019 was estimated to have reached $12.7 billion in sales, according to the authoritative Art Basel and UBS Global Art Market Report, making it the second-biggest in the world. But it’s still another example of how Brexit is bringing friction to markets where previously there was none.
With EU trade accounting for only about 20% of the value of the U.K. art market, some experts argue that the impact of Brexit will be limited, particularly at the top end of the market where global businesses such as large London auction houses will expand procedures they already use for non-EU transactions to their EU operations.
“The higher up the market, the more global it is,” said Anthony Browne, chairman of the British Art Market Federation. “It’s the smaller galleries and dealers and mid-market ones that have buyers in the EU that will be mostly affected.”
He said the Covid-19 pandemic has so far had a much bigger impact on the market than Brexit, since major art fairs such as Frieze London have had to be canceled.
Stewart Hopkirk manages the European road freight team at Martinspeed, a company focused on high-end clients. He said his company had one large shipment that moved a few hundred artworks before the year-end cut-off, but in his segment of the market there was “no real noticeable trend.”
The reasons why some galleries and dealers chose to move their collections vary, according to the people familiar with those decisions. Several calculated that their eventual buyers are more likely to be EU citizens rather than British nationals. Some pieces will eventually return to the U.K. on a temporary basis anyway, using an arrangement known as a Temporary Admission Bond, which allows owners to defer sales tax for up to two years
Others collectors decided that maintaining the pieces’ European status would better support their financial value in the longer term. A minority considered it would preserve the allure of artworks that were originally from Europe.
A small fraction of galleries that operate mostly in the U.K. made the journey in the opposite direction. Mattia Martinelli, owner of the London-based gallery Robertaebasta, said that he had moved as many as 60 pieces of art to the U.K. from Milan because most of the gallery’s clients are in London. He added, however, that several of his high net-worth clients, as well as other galleries, had moved their collections in the other direction.
“I currently have trucks stuck in both Britain and Italy as it’s still not clear what the rules are,” he said. “It’s a chaotic situation.”
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