ART MARKET / Parisian passions: Buying and selling art is more a way of life than a business in Paris, but it may never be the same after deregulation. Amid declining sales, auction houses are preparing to meet a British invasion

A MAN with sandy hair and spectacles came out of the lavatory of the Cafe Central carrying an unframed oil painting of a chambermaid. Nobody but me thought it was curious. I was in the cafe across the road from the Hotel Drouot, where the 72 licensed auctioneers of Paris hold most of their sales. It's a 'hotel' in the French sense of 'house', not a place where you spend the night.

All the neighbouring buildings, shops, cafes and restaurants are devoted to buying and selling junk or art - or are they the same thing? Guy Loudmer, an auctioneer with offices up the road in Rue Lafayette, describes Paris as a 'consumer' market for art - people collect with passion and enthusiasm, he says, whereas we in Britain merely trade in the stuff. The Hotel Drouot, with 20-odd salerooms, was like an anthill: people pouring in and out, up and down the escalators, always in a hurry, rushing to look for treasures, rushing to bid.

This way of life is under threat from the 'Anglo-Saxons' - that is how their French competitors refer to Sotheby's and Christie's, one American, the other British. They have been trying to hold sales in France for more than 10 years and it's odds on they will succeed in the next 12 months. Nothing will ever be the same again.

Up to now the French have successfully prevented foreigners from holding auctions in France through the elaborate judicial control of the auctioneering business. Auctioneers, or commissaire- priseurs, as they are called in French, are licensed by the Ministry of Justice and bound by strict rules. The government even dictates commission rates. Buyers' premium is only 2.5 per cent on items worth more than pounds 30,000, for instance. This has made France unviable for Sotheby's and Christie's, which charge 10 per cent.

However, a new French decree is expected any day stating that auctioneers may charge a flat 9 per cent premium. 'At that level business will be interesting,' says Francois Curiel, the clever jewellery expert who heads Christie's in Paris. 'We have several clients who would like us to hold sales for them here. I think we could do it at 9 per cent, even if we have to hire a French commissaire-priseur to wield the hammer for us - in order to conform with the present law.' Sotheby's has a more challenging strategy. Lord Gowrie, the European chairman, has written to the Ministry of Justice saying that Sotheby's has a client wishing to sell his important collection in Paris, and Sotheby's considers this should be permissible under the Treaty of Rome. It wants to charge its usual commissions, hold its own hammer and have no extraneous commissaire- priseur's name on the catalogues.

Like the decree, an answer is expected soon; a draft is known to exist and thought to say 'No, but . . .' If the French government leaves the door open a chink, Sotheby's will try to negotiate. If the door is closed in its face, it will complain to Brussels.

Meanwhile, the French art market is in just as much trouble as the British. According to a recent French press report, art galleries owe a total pounds 500m to the banks and the banks are beginning to foreclose on the debts. Big galleries, such as Isy Brachot and Baudoin Lebon, are being administered on behalf of creditors; rumours are rife as to who will go next. The auctioneers lament that the dealers are not buying at sales, even to prop up their own markets - they are doing so little business that they cannot afford to buy.

This makes for an eccentric and irregular run of auction prices. The big summer sales of modern art and French furniture held by Jean Louis Picard, for instance, were both half unsold, but had a sprinkling of high prices.

Dina Vierny - who, in her early days, was Maillol's favourite model - was Jean Louis Picard's salvation. She spent pounds 200,000 on a large Maillol drawing of herself in the nude, which he had estimated at between pounds 50,000 and pounds 60,000. It is the highest price ever paid at auction for one of the sculptor's drawings, and is intended for the new Maillol museum which she is helping to set up in Paris.

Only a few collectors can afford such prices, but auctioneers that offer paintings in the low thousands or hundreds have the Paris 'consumers' rushing to their call. Guy Loudmer had three auctions which were 100 per cent sold over the last month - an almost unheard of event outside Paris. He did it with a collection of 316 books about food and wine on 19 June, with a group of 96 abstract watercolours and drawings by Auguste Herbin, a great minor master of the inter-war years, on 24 June, and with 91 lots of paintings and drawings by the Belgian Neo-impressionist Georges Lemmen (1865-1916) on 29 June.

The big mover in the auction scene is Jacques Tajan, a man with a monumental ego and a lot of clever ideas. His friendship with President Francois Mitterrand and other left- wing politicians is believed to lie behind the decision to let auctioneers charge a 9 per cent premium. Tajan has long wanted to run an Anglo- Saxon-style auction house. He sees allowing Sotheby's and Christie's in as a necessary price to pay for recreating Paris as a great art market centre. That Paris has played second fiddle to London since the Fifties rankles with every Frenchman.

Over the past few months Tajan has been conjuring new markets from nothing - not without success. In April he got together with Bruno Perrier, a dealer in Medieval and Renaissance furniture, and created the most successful sale in the field for decades. By publishing a spectacular catalogue and attracting buyers from all over Europe, he multiplied the prices that Perrier had previously been asking by about five and earned the dealer pounds 2m.

He tried to do the same when he sold the contents of a 16th-century Loire chateau which had belonged to Bernard Steinitz, the Paris dealer, for the past 20 years. Tajan managed to sell only two-thirds of the furniture on offer, earning Steinitz pounds 2m.

Steinitz says he intends to use the proceeds to finance a new international auction centre in the heart of the Paris flea market at St Ouen. He too believes Sotheby's and Christie's are about to break the age-old monopoly of the French commissaire- priseurs, and intends to give them a good run for their money.

(Photographs omitted)