How Italy’s Moribund Market Makes miart One of Europe’s Most Exciting Fairs
In 2014, the market for art and antiquities in Italy represented 0.8% of the global market for fine art and 2.5% of the European market, according to the latest TEFAF Art Market Report. The figures mark a decrease from the previous year when Italy represented 1% and 3% of the respective market segments. Interestingly, the contraction of the market is due, not to a reduction in transactions, but to a diminished marginal value of the works sold. In Italy, the majority of art sales take place on the low end of the market (€3,000–50,000). Auction houses do not play a particularly extensive role; galleries and private sales make up the majority of transactions. Also, imports and exports of art are very limited: 0% and 2% of the global art market, respectively.
An analysis of those statistics could suggest that Italian collectors, especially big collectors, are not buying art anymore. However, those conclusions don’t exactly fit with what’s actually happening. Italian collectors still buy art and international collectors seek out the works of many Italian artists, but Italy has created a system such that wealthy collectors go and buy art abroad and keep it outside the country.
A major deterrent to domestic collecting is the country’s heavy regulatory environment: a gallery must report each sale they make to the government and include the name of the buyer and price paid. The information is then checked against the level of taxes paid by the collector’s entire estate. In the past, art in Italy was often purchased with cash. But since 2012, all cash transactions (for art or any other goods) above €1000 have been banned in order to limit tax avoidance and money laundering.
Moreover, Italy’s level of taxation on works of art is the highest in Europe, with Value Added Tax (VAT) on art purchases a whopping 22%. Permanently importing a work of art to Italy from a non-EU country is subject to a 10% VAT, again, the highest in the Euro Zone. There is also a risk of not being able to export what you bought in the country: obtaining export permits is a complicated process and the results are unpredictable. Any work which is over 50 years old must have an export licence, regardless of its value. In nearby France or in the UK the threshold for an export license being required is €150,000. What’s more, if the work is thought to be of national importance, it can be subjected to a permanent export ban, regardless of if the state is willing or able to purchase it, and thus lose a great part of its economic value in the international market.
But, if doing business in Italy is so onerous, how did Milan’s fair for modern and contemporary art, miart, attract the dynamic international galleries it has for next week’s edition? When the 37-year-old curator Vincenzo de Bellis—the founder of Peep-Hole, a nonprofit space in Milan dedicated to emerging art—took the helm at miart in 2012, the fair was at what many saw as its low point with regard to quality. Around 100 galleries participated that year and only 12 of them weren’t Italian. Three years later, 72 of the 156 participating galleries are headed to Milan from abroad and represent some of the most dynamic emerging programs out there. If it’s true that collectors aren’t buying heavily in Italy, what’s driving those galleries to invest money and resources in miart?
Some of them have an existing connection to the Italian market. Rebecca May Marston of London’s Limoncello Gallery notes that aside from the Neapolitan liquor that serves as their namesake, the gallery’s two Italian artists—
For many galleries, sales aren’t the greatest draw to miart. Significant hype has developed around the fair’s brand in only three short years since its curatorial revamp. It’s proving to attract a similar crowd of international curators, collectors, other art market players, and press as many of the other major fairs—but with booths that cost only a fraction of the price. Steve Pulimood of Room East, New York explains that it’s exciting to join the fair “not only because of the excellence of the young section, but also because of the leadership of de Bellis. Publications like Kaleidoscope and Mousse, and pioneering spaces like Peep-Hole and Gasconade add to the excitement of looking at contemporary art in Milan right now."
It’s not as if sales are far from dealer’s minds. But in today’s market, certain fairs can be near equally worthwhile, whether its money or business cards that are immediately changing hands. Aside from collectors who, whether due to business conditions in a particular country or general proclivities, are slow to commit to a purchase, curators use fairs with ever-increasing frequency to select artists for museum shows or biennales. With attention flocking to the city this spring thanks to Expo Milano 2015 (which opens May 1st), international exposure at miart is likely to be at an all-time high.
And anyhow, there were sales at miart in 2013 and 2014. In a recent interview (Il Giornale dell’Arte, March 2015), de Bellis said sales were up by 45% in comparison to the years before he took over. He added one important and telling caveat, however: that it is difficult to say exactly how much business was generated in total by the fair, because “almost all the transactions are completed once the fair is over.” This art-fair-as-showroom phenomenon is not concentrated solely on Italy; many fairs on the European continent have seen an increase in such reports of galleries that come to show their stock and conclude their sales once back in their own country. At miart, however, organizers have used that facet to place the focus on experimental presentations and, though it’s still early to say, have potentially opened up a new market in the process.
Chiara Zampetti Egidi
Chiara Zampetti Egidi is the author of “Guida al Mercato dell’Arte Moderna e Contemporanea” (Skira 2014).