How Brexit Is Still Impacting the British Art Market

At first, it was frustration, then it was confusion, and now… well, no one really knows. It’s been more than five years since the U.K. voted to leave the European Union (EU) and the U.K. art market, like the country as a whole, is still wondering what Brexit actually means.

Dealers are tired of talking about Brexit, but they also can’t ignore it as the British art market enters an uncertain 2023. That’s because, for collectors, gallerists, and dealers in the U.K., a combination of legislative, bureaucratic, and economic factors brought about by leaving the EU are making it more costly and less efficient to buy and sell art. The impact of Brexit, it turns out, is ongoing.

Not only does the U.K. begin the year facing the “worst and longest” recession of any country in the G7, but two staples of London’s art fair circuit, Masterpiece London and the Art & Antiques Fair Olympia, recently announced that they were canceling their summer editions. Both fairs cited escalating costs and a decline in the number of dealers, and both organizers mentioned the impact of Brexit as a contributing factor.

The cancellation of Masterpiece, which is owned by Art Basel’s parent company MCH Group, felt particularly significant.

“It’s very sad for the London art world—and London more generally,” said William Summerfield, head of sales and a specialist in modern British and 20th-century art at the auction house Roseberys. “The fair had a very particular style that was entirely ‘Chelsea’ and I think a lot of non-‘artworld’ buyers and visitors were more comfortable with [it] than some of the other, larger fairs.”

It’s unclear what the spillover of the fair’s cancellation will be for the British art market more broadly. Yet, as Summerfield cautioned, “losing a major yearly event always has a knock-on.”

But there’s also the question of what this says about the British art market today. There were already signs that the European presence at Masterpiece was wilting, with stands from the continent falling by almost 60% between 2018 and 2022, according to the Financial Times. The cancellation may have been a shock, but it wasn’t a huge surprise.

“The organizers were rather circumspect, talking about less international attendance, but what that translates into is that the Europeans aren’t coming anymore,” said Gregor Kleinknecht, a partner at Keystone Law and specialist in art law and dispute resolution for clients that include collectors, galleries, institutions, and dealers. “That’s both the exhibitors and the trade who would normally take up stands at the fair, but also the collectors. There is less incentive to come to London with all the complications after Brexit.”

Masterpiece is the latest art world example of how Brexit is crystallizing and exacerbating difficulties for an already febrile British economy, which can no longer blame COVID-19 lockdowns for its woes.

“Effectively, the U.K. has pulled out of the world’s largest and most effective trade agreement and, predictably, that has consequently made trade more difficult,” said James Ryan, CEO of Grove Gallery, which has spaces in London, Switzerland, New York, and Australia. “Quite aside from the unpleasantness of directly rebuffing those nations we do the most trade with, it has served to reduce that trade, including the trade in art and antiques—which has been negative for all those involved.”

Brexit legislation is impacting the art trade in a number of ways, touching on everything from taxation to employment all the way through to data protection, dispute resolution, and copyright. It’s led to heaps of red tape, all amounting to the basic fact that the free movement of people and goods between the U.K. and EU no longer exists in the fluid way that it once did. Art—and artists—have become more difficult and more expensive to move across the continent.

The British art market is still adjusting to this new normal, but the impact has already been drastic. In the two years since the U.K. formally left the EU’s single market and customs union, its share of the global art market has plummeted to its lowest level in a decade. Dealers complain about extra VAT (value-added tax) and shipping costs, which can mean spending more than four times than before on logistics. Smaller galleries are overburdened with extra paperwork. Christie’s has noted a “drop-off” in EU consignments in London, and collectors are being disrupted, too.

Fiorenzo Manganiello, an Italian-based private collector and patron of the Lian Foundation, told Artsy that the administrative aspect of importing works from London has become “cumbersome” since Brexit: “I have experienced logistical issues and work being blocked sometimes for months at a time,” he said.

EU countries such as France, meanwhile, are seizing on the fallout. Last year was a banner year for the French market: The country hosted a shiny new international art fair, enjoyed record-breaking results at its auction houses, and enacted policies that, ominously, aim to “take up the challenge of the French reconquest of the art market,” according to the Art Law Review.

So far, so bleak for the U.K. art market. But is it all disaster ahead? While everyone that Artsy spoke to for this piece acknowledged the difficulties caused by Brexit, many were quick to find optimism in the reputation and heritage of the British market, as well as its enviable ability to produce top artistic talent. Galleries continue to open, museums continue to host world-class shows, work continues to sell, and London remains a leading light of the international art market, they say.

“For me, London is the place where innovations in art still take place, surrounded by top-tier art schools and universities,” said Manganiello. Britain still remains a “top-tier destination” to acquire artworks, meet artists, and discover emerging galleries, he added, noting that he’s increasing the number of works from London galleries.