The Distillery: Blood pressure

Jotters see the wisdom in CSL's withdrawal from its legal stoush, with one arguing the fight was never worth it.

Little has changed in relation to the Washington impasse, leaving the commentariat to look closer to home for fodder. In CSL, a number of scribes find the practicalities of running a public company winning over a fight for maintaining its reputation. While in politics, one scribe hits on two big victories for the Abbott government so far and describes how they will complement each other for the betterment of the economy.

The Australian Financial Review’s Matthew Stevens sees pragmatism at the heart of CSL’s decision to settle its cartel case in America. The blood plasma company has, for four years, been fighting complaints it colluded with major competitor Baxter, but it finally appears the battle was costing more than a settlement was worth.

“Over the four years of discovery that ended only last month, CSL’s legal fees have topped $US20 million. And, the real legal business of defending the company’s reputation had not even really started yet. In the end, like so many before it, CSL has, in the name of all that is prudent and rational, been forced to feed the beast of class actions rather than fight it. The simple actuarial fact here is that it was going to cost more to fight than to settle.”

Fairfax’s Eli Greenblat sings a similar tune, indicating that CSL was willing to take an unnecessary hit to its reputation in exchange for a reduction in costs.

“The plaintiffs lined up against CSL never found a 'smoking gun' that would have proved their case. However, sometimes a little bit of hysteria can go a long way.”

The Australian’s John Durie, in contrast, focuses on the competition background to the case, which meant scrutiny – albeit likely unfair – was no doubt going to come at some point.

“Now there is a cosy oligopoly with three players – CSL, Grifols and Baxter – sharing the market, but arguably the market is still competitive and economies of scale mean consumer benefits.”

Meanwhile the Herald Sun’s Terry McCrann reports on two big wins for the Abbott government. The first was a surprising win in the make-up of the Senate and the second is a less surprising boost in business confidence. And the combination could have significant flow-on effects.

“For Abbott the two victories should work as self-reinforcing win-wins. A government that can, to put it simply, govern, without a sense of crisis, or even the exaggerated spin and drama of the two Rudd administrations, will further boost business confidence. And a confident business sector, prepared to invest and create jobs, will make it that much easier for the government to govern, without crisis.”

While McCrann is bullish on the prospects for the Abbott government to prove a boon for business, The Australian’s Adam Creighton hits on concerns with the government’s attempts to pre-empt the Commission of Audit. The peak infrastructure body, Creighton notes, is warning against dismissing the sales of $110 billion worth of public assets without due process.

The government isn’t pre-empting a decision on the GrainCorp takeover, however, in fact pushing the deadline back to December 17. Fairfax’s Brian Robins ponders the uncertainty that will fester as a result of the move.

Elsewhere, the AFR’s Chanticleer columnist, Michael Smith, considers the current moves at Qantas and says the likelihood of a takeover are slim, while his colleague Philip Baker looks to history to put America’s possible debt default into context. It has happened three times before, he says, and it could happen again.

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