SOTHEBY'S INCREASE BUYER'S PREMIUM TO 15%

Published: 23 July, 2008

Sotheby's has increased the buyer's premium from ten to 15% of the hammer price, starting with its sale on 24 April. The higher rate and the way it has been introduced have annoyed Farr Vintners, one of the auction house's biggest customers, as well as one of its closest competitors. According to Tom Hudson (ex-Christie's, speaking before the sale), We will simply bid 5% less than we would have normally. But that means that we will often be bidding under the reserve price.' Hudson says he suspects that many other bidders will follow suit, and that it will be interesting to see the percentage sold. They're already generally taking 10% commission from the seller, and now they're taking 15% from the buyer, so they're going for a margin of 25% - more than most in the trade. We're broking on 10%. I can't see how they can compete. What's also annoyed us is the way they introduced it, as if nobody would notice. We found out about it only by chance. It's all a bit below the belt, really.' Stephen Mould, a director at Sotheby's Wine Department, rejected such charges, saying that the increase was justified'. We haven't changed the commission rate since it was introduced in 1984. Other departments in the company are charging 15%, as is New York. We have to spend a lot of money checking provenance, stock and so on. If people want to bid 5% less, that's up to them. But at the end of the day, if they want the stock, they'll need to bid. There's no fixed price.' Mould also insisted that adequate notice of the change was given. As well as stating the new rate in the catalogue for the sale on 24 April, his department wrote to all those who submitted written bids, making sure they were aware of the rise. He said that notices would also have been left on auction room seats, and that he would have announced it from the rostrum too. We did highlight it enough,' he said. A Christie's spokesperson said that its Wine Department intended to keep rates at the current level for the foreseeable future'.

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