Nestle is removing the 4.5 health star rating from its popular Milo drink powder.
The company says it made the decision pending the outcome of a government review in Australia of the Health Star Rating (HSR) system.
Consumer New Zealand chief executive Sue Chetwin has welcomed the move, saying Milo has a 4.5 star rating – out of a possible five stars – despite the fact it is almost 50 percent sugar.
Milo's high rating is based on the drink being made with skim milk. On its own, the powder only earns 1.5 stars.
"It's the skim milk that boosts the number of stars. But our research found most Milo drinkers prepare the drink with standard blue top or full-cream milk," Ms Chetwin said.
Consumer NZ has been campaigning to get rid of the "as prepared" loophole of the HSR system. It says it supports ratings being calculated on an "as sold" basis, with the exception of products that need to be drained or reconstituted with water.
Nestlé spokesperson Margaret Stuart said that the decision to remove the rating in no way reduces its commitment to the HSR system as a whole.
It currently uses the system on 180 of its products in New Zealand.
She said that a "misunderstanding about the way the HSR is been calculated on Milo powder has been used to question the system."
"The system, which was developed with the input of many stakeholders, is fundamentally sound, scientifically robust and compares well with front of pack labelling systems in other countries," Ms Stuart added.
The 4.5 star rating will disappear from Milo powder in June. Other Milo branded products including Milo ready-to drink UHT will retain the health star rating.