Traffic light labelling, based on a similar UK initiative, is one of a number of proposal's being suggested to curb growing concern over obesity in the country.
Processors are coming under greater pressure from both governments and consumers to ensure they are supplying and informing customers properly.
The system works by rating a product over four nutritional qualities like fats, saturates, sugars and salts, with either a green, (for products with low levels) amber, (marginal) or red (high).
A product that is shown to contain a large number of red lights would therefore tell a consumer that it carries a greater risk of causing health problems like obesity or heart disease.
Dick Wells, chief executive of the Australian Food and Grocery Council (AFGC), told AP-FoodTechnolgoy.com that the council was very much opposed to this type of labelling, which distorts consumer views over a balanced diet, he claims.
"Simply labelling foods red, green or amber doesn't give consumers enough information to help them work out what constitutes an appropriate portion size for either treats or staple foods," he said.
In particular he was concerned that the visual approach of traffic label failed to give a true impression of a product's importance in overall diet.
"For example, many common staple foods, including cheese, wouldn't be classified as 'healthy' despite the fact that they supply essential nutrients and micronutrients," added Wells.
He said that the AFGC preferred a rival scheme based on daily intake labelling that it itself helped develop.
Through daily intake labelling, Wells believes consumers will be able to better assess how a product affects their individual diet. The initiative uses a thumbnail panel to show what a product contains.
"What consumers know by reading the nutrition information panel is that by eating a portion of product X they will be consuming 870 kilojoules," said Wells. "Daily intake labelling tells them that eating those same 870 kilojoules represents 10 per cent of their daily energy needs."
The scheme has already been voluntarily adopted by many leading industry players, including groups like Kraft, MasterFoods, Cadbury Schweppes, Unilever, and Coca-Cola.
However, not everyone related to the issue believes that the industry backing has the best ideas over picking nutritional labelling.
The Menzies Research Institute (MRI), a health group within the country, disagrees with the industry stance, suggesting that daily intake labelling benefits businesses and not the consumer.
By contrast, it says a simple colour coding system can be understood immediately by any consumer, giving them the best opportunity to moderate their own diets.
By encouraging consumers to look for products with more green lights, the system would also benefit products and companies who look to "healthier" formulations.
With the discussions seemingly stalling on a solution over dietary labels, the MRI's Trevor Beard, calls on government to adopt a five year period of voluntary use to test the effectiveness of all suggested labelling initiatives.
Only through proper evaluation, he says, and not lobbying tactics, can the best method for reforming nutrition labelling be found.
