Coles reduces cash withdrawal limit amid Armaguard money woes

Coles has resumed Armaguard cash deliveries with the money transit company, following a brief pause this week.

It comes as the grocery giant has reduced money withdrawal limits in supermarkets from $400 to $200, as concerns grow about the future of the currency handling company.

“Coles can confirm that normal cash collection and processing services from Armaguard have resumed,” Coles told 7NEWS.com.au.

“Customers can continue to pay with and withdraw cash at Coles supermarkets and liquor stores this weekend and ongoing.”

Armaguard, a subsidiary of Lindsay Fox’s Linfox, was offered a funding boost from a group of big banks and retailers — but rejected the offer

Chief executive officer of Armaguard Mick Cronin said the company was “working constructively” with stakeholders “regarding both short-term and long-term financial solutions for the industry to remain sustainable”.

“Armaguard continues to operate its full suite of services and is confident that over the coming months, it will get the business onto a long term sustainable footing with appropriate support from the industry.”

Cash withdrawal pause

Coles briefly paused Armaguard cash deliveries due to the evolving situation.

It has also reduced withdrawal limits at supermarkets and liquor stores from $400 to $200 indefinitely, which it says is in line with other major retailers.

“Due to industry-wide challenges with cash movements, we are taking some temporary steps to prepare for disruption to Armaguard services,” Coles said.

Last year, Woolworths reduced its withdrawal limit from $500 down to $200 and introduced a requirement for customers to make a purchase first.

On March 19, the big four banks, Wesfarmers, Coles, Woolworths and Australia Post put a funding offer of about $26 million to Armaguard.

Armaguard approached retailers and banks in late October to request a cash injection to keep providing distribution services after its merger with competitor Prosegur was approved.

Negotiations kicked off in earnest in December, and there have since been dozens of meetings.

There was no expectation for the money to be repaid, but it came with conditions, including an accountant to provide guidance on how to make the business viable.

Linfox has been approached for comment.