A good start (the auction culture that is France)

by on January 29, 2013 at 12:54 am in Food and Drink, Political Science, Uncategorized | Permalink

The city of Dijon has just sold off half of its prized municipal wine cellar to help fund local social spending – including a bottle of 1999 Burgundy knocked down at auction for €4,800 to a Chinese buyer.

In total, the capital of the Burgundy region raised €151,620 from the “historic sale” of 3,500 bottles that were part of a collection built up since the 1960s, it announced in a statement on Monday.

François Rebsamen, the Socialist mayor who ordered Sunday’s auction, explained: “We have overall a good budget this year, but the social action spending of the city just keeps going up. There are more and more of our co-citizens who are appealing for social aid.”

From the FT, here is more.  Apparently they are listening to Alex.

Ashok Rao January 29, 2013 at 1:06 am

Interesting.

I’m really not sure how true the stereotypes about French and their wine are, and I’m a fan of selling of assets for a stopgap on deficits (at least state owned factories, etc.) but the public sale of almost artistic goods seems to set a dangerous precedent. Would be a shame to see public art galleries worth quite a but of money privatized to fund poorly designed “social action”.

Adrian Ratnapal January 29, 2013 at 3:18 am

Yeah. Better to just burn the galleries down and enjoy the bonfire.

dan1111 January 29, 2013 at 3:53 am

The comparison does not hold. The artistic value of a painting can be enjoyed by as many people as come see it. Thus there is a clear public benefit to government sponsoring art galleries, as it gives more people access to art. On the other hand, a bottle of wine can only be enjoyed by a few people at most, and only when it is actually consumed. It’s not clear how the government stockpiling wine benefits the public. In fact, if it has any effect at all it will be to increase the demand for wine, thus reducing the public’s access to it.

Ashok Rao January 29, 2013 at 4:32 am

Yep, I understand that, which is why I said I don’t know about French’s wine culture. But I would think some bottles are so ancient and/or cherished that no one would actually drink them, but that they would rather be cultural artifacts?

Rahul January 29, 2013 at 4:49 am

We just get a new owner of the artifact then. What’s wrong with that?

axa January 29, 2013 at 3:47 pm

cherishing a 1999 artifact? i can sell you my 1998 pick up truck for the right price ;)

IVV January 29, 2013 at 8:52 am

Wine’s an interesting product as an objet d’art, because for those in the upper-end market, it provides value in two possible ways: consumption and cellaring.

In consumption, you taste it. Only a few people can enjoy the wine in this fashion, and once it is enjoyed, it is gone. In cellaring, the enjoyment comes from the ownership of the wine itself; it demonstrates your skill in locating rare items, and the prestige in being able to properly care for it. Merely viewing the bottle, especially if it’s someone else’s bottle, confers little benefit.

As a result, a wine cellar is not a particularly useful public good. You can’t display wine and expect tourism to result. It makes a lot of sense for the wine to be sold off to others who might get satisfaction from knowing they spent €4,800 on a bottle.

A winery, on the other hand, can be used as a source of public pride, tourism money, and product to export.

Slocum January 29, 2013 at 6:43 am

I’m not sure how big a difference it would make if the collections were kept intact — in the U.S. anyway, art museums already seem to be charging market-rate prices for admissions.

One place where the sale of publicly owned art might become an issue fairly soon is Detroit. The Detroit Institute of Arts and most of its collection are owned by the city itself, which appears headed for bankruptcy. Could a bankruptcy judge order an art sale?

Rahul January 29, 2013 at 6:54 am

Why would that be an issue? Maybe the bankrupt city ought to sell art before a ruling forces it to.

dan1111 January 29, 2013 at 7:49 am

Yes, but Detroit doesn’t do what it “ought” to do. Hence the bankruptcy.

dan1111 January 29, 2013 at 7:47 am

Government ownership of art does provide a benefit, similar to national parks: it guarantees public access to a strictly limited resource. There is only one Mona Lisa, and if it is owned by a private collector, there is no guarantee that the public will be able to see it.

Whether it passes the cost-benefit test is another matter, and would depend on the specific situation (in my opinion).

Emil January 29, 2013 at 9:51 am

There is no guarantee that the public will be able to see all of the things held by the public either (e.g. wine held in wine cellars)

JWatts January 29, 2013 at 10:15 am

Furthermore, The Smithsonian sits on thousands of artifacts that rarely if ever go on display. Placing those artifacts into private hands would be a win-win.

Ed January 29, 2013 at 3:02 am

I’m sure “Chinese buyers” would be more than happy to pay to move the contents of the Louvre to China, and that alone would pay for a few years of French social spending.

To January 29, 2013 at 3:34 am
dan1111 January 29, 2013 at 3:56 am

In what sense is a government wine stockpile similar to the Louvre? Can you offer a justification for the government owning wine in the first place?

Slocum January 29, 2013 at 8:13 am

Local Dijon politicians are going to serve fine wines when entertaining dignitaries regardless of whether or not there’s a wine cellar (especially given that Dijon is the capital of the Burgandy wine region) — in terms of cost, I’m not sure it makes much difference whether they maintain an inventory or not.

Cliff January 29, 2013 at 10:05 am

A $200,000 inventory?

Slocum January 29, 2013 at 11:32 am

Shrug. Less than the cost of a house there. And acquired over a period of many decades. Once the one-time proceeds are spent, how much less (if any) would you expect the city of Dijon to spend per year on wine than now (and keep in mind that the article talked of using some of the funds to rebuild the cellar)? A couple thousand euros at most? In fact, this may be a case of of selling some valuable older, collectible wines that weren’t going to be served anyway and replacing them with newer bottles that will be drunk (or saved until the next go around).

Ed January 29, 2013 at 3:46 am

This will be interesting to watch long term. The Louvre itself was created to a large extent by the French helping themselves to the cultural patrimony of more down-at-the-heels nations, notably Italy. So it may be to be expected that this stuff will wind up in whatever is top nation in the future. I know there is a movement to try to return art to the country of origin, but other than the fact that the country of origin is hard to determine or itself has changed beyond recognition since the art was created, I think this asks too much of human nature. I think its more likely that we will see the Louvre art dispersed in the long term to China and the Persian Gulf than brought back to Italy, Egypt, and Greece.

Millian January 29, 2013 at 7:01 am

Perhaps not so much “top nation” as “nation with spare cash reserves”. The Netherlands is very wealthy, but they don’t have a lot of cash to waste on stuff. If China ever gets a welfare state, the same will be true there.

Steven Kopits January 29, 2013 at 7:30 am

Tyler -

Let’s have more on the economics of museums. That’s actually an interesting topic.

Only a very small portion of the collections of the Louvre other major museums is on display at any given time. I think it would make a great deal of sense to provide additional venues for shows–including in China. In the end, holdings of art (like income, per SS) only matter is someone actually consumes them, ie, gets to see them.

Rdavout January 29, 2013 at 8:18 pm

This is already happening. Louvre Abu Dhabi was already mentioned but the new Louvre Lens, located in a secondary city in the French Rust Belt is worth mentioning too. 700,000 visitors expected for its first year. For modern art, the Centre Pompidou opened a venue in Metz in 2010 and it’s an incredible success – it immediately became France’s most visited exhibition venue outside of the Greater Paris (475,000 visitors in 2012).

More generated revenue and a better territorial distribution of high-quality temporary exhibitions while using the same collections. Good thing the French Ministry of Culture has started looking beyond subsidies and started using some good business sense and creative thinking!

Roland January 29, 2013 at 9:55 am

This is not as surprising as it seems–the Hospital in Baune, just to the south, has been producing and auctioning wine to support its services for hundreds of years..

Rdavout January 29, 2013 at 8:34 pm

The Hospice of Beaune. A totally different situation altogether: (1) they produce the wine, (2) they’re not selling off assets, (3) they’re not hoarding a resource totally unrelated to their public service mission.

Originally a religious institution with a very sound investment policy, les Hospices de Beaune weren’t stripped of all their revenue-generating assets and, though now morphed into a State-affiliated organization, they still own a successful 62 ha vineyard. Once a year, they raise money for health research and other charitable causes by means of a wine auction (perhaps the world’s largest charity sale, though I was expecting/hoping there would be something similar generating more than 1.8–5.2 M EUR in sales).

Brian Donohue January 29, 2013 at 10:40 am

+1 for transparency! It’s not so obvious that a nation is spending down its wealth when it makes lavish promises to its citizens that it can’t afford. This is the start of the other shoe dropping. Good for you France.

Floccina January 30, 2013 at 12:32 pm

Wow those buyers were scammed. That is almost as bad as the state lotteries, it is just wine you can just as good wine for $50 a bottle.

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