The focus is on "low-fat" products which are junk foods in every other sense of the word - the low-fat muffin stuffed with sugar or the 99 per cent fat-free breakfast cereals better suited to the biscuit aisle.
FSANZ has proposed that food advertised as "low-fat" must fit a broader criteria of "healthiness", measured by good features (protein, fibre, fruit and vegetables) and bad features (high levels of calories, salt, sugar and saturated fat). Some low-fat breakfast cereals (low-fat but high in sugar and salt) and some low-fat salad dressings, simmer sauces and stock (often high in sodium) would fail the test.
Another proposal from the agency is to ban products being advertised as "low-fat" when they would not contain a lot of fat in the first place, such as lollies.
The second part of the proposal sets out clear measurements for using terms such as "low", "reduced", "light" and "unsweetened" (looking at cholesterol, calories, salt, sugar) as well as "increased", "high in", "a good source of" (measuring protein, dietary fibre, protein, minerals).
The third part of the proposal tackles the advertising of health-boosting abilities in foods.
At present apples cannot be advertised as good for your health but the proposals would allow many changes, including claims such as milk reducing the risk of osteoporosis.
Green Party spokeswoman on food Mojo Mathers says consumers have the right to know if their food is nutritious and fair labelling on food is a vital part of making an informed choice. "FSANZ needs to do the right thing by consumers and prioritise the feedback and concerns of health organisations ahead of industry lobbying," she says.
"At the very least, fat-free and low-fat claims should not be allowed to be made for foods with a high sugar content.
"We have an impending diabetes crisis and this is exacerbated by excessive sugar intake. Consumers are rightly worried about fat intake because of the link to heart disease, but fat-free and low-fat claims on foods that are of low nutritional value or high sugar levels can give a false sense of reassurance."
Food and Grocery Council chief executive Katherine Rich concedes that if the proposals come into effect some manufacturers will have to remove front-of-pack advertising that implies a healthier choice.
Buyers lulled by ad speak messages
Haley Johnson, 21, admits her common sense and intelligence can take a back seat when she steps into the supermarket.
She'd buy a bag of "healthy" reduced-fat chips without checking the nutrition panel and would probably feel quite good about eating a low-fat muffin because - like many busy shoppers - the Aucklander bases her decisions on the cleverly worded packaging.
Similarly, tertiary students Clare Dickson and Caitlin Busby, both 18, say they have considered some products "healthy" because of implied messages on packets. Dickson says she went through a stage of drinking a lot of "diet" softdrinks
before realising they contained high levels of salt and chemicals.
The teenagers recently learned their favourite brand of "baked, not fried" crackers was just as fattening as regular chips.