High-profile divorce stuns art world

Backbiting and turf wars have soured the deal between revered auction house and UK's most influential gallery.

Art for art's sake be damned: with millions at stake, territorial rows and tempers are flaring in the moneyed world of the art market and particularly behind the scenes at Christie's auction house.

This time, the falling-out – a very high-profile divorce between Christie's and one of the most influential figures in British art – has created a certain amount of malevolent glee.

Christie's – which this month will help to sell hundreds of millions of pounds worth of art in what is expected to be the most lucrative season of auctions London has ever seen – is nursing its bruises after a falling-out with the founders of a small but highly influential art gallery.

Other galleries are said to be beside themselves with joy at the argument between the auction house and the small Haunch of Venison gallery in London.

Haunch of Venison sells new work straight from the studios of internationally acclaimed artists such as the sculptor Rachel Howard, the video artist Bill Viola and the film director and photographer Wim Wenders. Christie's, on the other hand, is effectively a dealer in second-hand art.

So, when the auction house bought Haunch of Venison in 2007, other gallery owners feared that its intervention was not only bad for art, but also could put them all out of business. A gallery, the argument goes, can nurture an emerging artist's career and place his or her work with certain collectors; an auction house is interested only in maximising profit.

The difference can be seen in the balance sheets. Haunch earned £1.6m from a £66m turnover in 2007. By contrast Christie's turned over £244m in contemporary art sales alone last year – a figure down by more than half on the previous year because of the credit crunch.

If Christie's sold new art successfully then there would be no need for any more galleries: hence glee that the partnership has gone sour.

Haunch of Venison was founded in 2002 by a former stockbroker called Harry Blain and a former Christie's expert called Graham Southern. Such was its success that in 2009 Mr Blain was dubbed the most powerful man in British art.

Now he and Mr Southern have announced they are to leave the gallery they founded.

Christie's and Haunch claim the split is amicable; merely the result of "different visions". But insiders say it is the culmination of months of back-biting, turf wars and arguments over who gets to sell the extraordinarily valuable works of contemporary art that come on the market.

One source, connected closely with Christie's, told The Independent on Sunday that the rows were over clients and sales. Part of the deal to buy Haunch meant that Christie's private sales of post-war and contemporary sales would go over to the gallery, leaving the staff of that department with their noses out of joint.

"There was a lot of acrimony between the different players behind Haunch of Venison and Christie's," the source said. "Everyone wants to protect their own clients for themselves, so they don't want to share their information. The deal was that Haunch wouldn't just look after the primary market for Christie's but also be the site for all of Christie's private sales as well. But if you're a specialist in Christie's contemporary department you want those sales to go into your books; you want the commission, the rewards. Then you get fights over clients happening. As a business model it is totally flawed."

The Economist, which broke the story, said the row was over "corporate politics, turf wars and information withholding".

Even the artist Damien Hirst has been pulled into the dispute. "Auction houses have been around for a long time, but it seems like they are struggling to know exactly what their role should be," he said. "(Christie's and Haunch of Venison) seemed to get on each other's nerves."

Sarah Thornton, a writer on contemporary art who wrote The Economist story, added that news of the break-up would please gallery owners who feared three years ago that they were about to be cut out of their business by the juggernauts of Christie's and Sotheby's, the latter firm handling the straight-to-auction sale of new work by Damien Hirst.

"A lot of gallerists will be joyful," she said. "I think a lot of people were worried when Christie's bought Haunch. They didn't like the extra competition and are now probably relieved.

Christie's and Harry Blain sought to put a different gloss on the divorce this weekend. "It's an amicable departure," Mr Blain said. "We are leaving to establish a new gallery in the West End, which will deal on the primary and secondary markets; we should be opening early next year. I'm looking forward to getting back to working more closely with the artists. A large organisation sometimes pulls you away from that."

Christie's added: "We wish Harry and Graham every success in their future endeavours and are confident that the team at Haunch will continue and extend the vibrant role it plays in the contemporary art market."