After a brief bidding war between two phone bidders, an unknown buyer snapped up the painting at the Deutscher-Menzies auction house in Sydney. The price included a buyer's premium. Most Australian auction houses would send a work of such value to Europe or the US. But this painting belonged to Deutscher-Menzies director Rod Menzies. He paid $US4,608,000 for it in 2006, which was the equivalent of about $A6.2 million at the time.

Mr Menzies, an aggressive competitor in the auction business, hopes the sale will boost his company's profits and reputation. "This sale does give us the opportunity to extend our bottom line," said Tim Abdallah, the national head of art at Deutscher-Menzies. "There is a risk for the vendor (in selling it in Australia) but we want to explore the possibility of expanding our market by selling paintings of this calibre in this country." To promote the sale internationally, Deutscher-Menzies spent $20,000 placing advertisements in newspapers all over the world.

"We had interest from a private collector in New York, from two sources in London and a nibble from Hong Kong," Mr Abdallah said. "If people know there is a well-priced picture on sale, the buyers will find it, no matter where it is."

The managing director of Sotheby's Australia, Lesley Alway, said valuable international works usually fetched more in London, New York and Hong Kong. "That way they get included in major international catalogues and get seen by a broader group of serious collectors," she said. By selling the painting in Australia, Deutscher-Menzies made it more difficult for international buyers to view the work before the sale.

"The home market (for a Picasso oil painting) is not here," said Michael Reid, and art market analyst and dealer. "But Rod (Menzies) has considerations beyond that. He wants an increase in turnover. He wants to be seen to sell major pictures and to add interest to what is otherwise a fairly run-of-the-mill auction." The auction coincides with an exhibition of Picasso's work at Brisbane's Gallery of Modern Art. Mr Abdallah denied the company was cashing in on the publicity for the exhibition in Queensland.

"We know that survey exhibitions can have a dramatic effect on prices, but the timing was just a happy coincidence," he said. The Picasso sale broke the country's previous record of $3.48 million, paid for a work last year by the late Australian painter Brett Whiteley.



- With REUTERS