Associate Health Minister Peter Dunne says the Government sees no issue with sports teams being sponsored by brands whose products have high sugar content.
That’s despite The Dental Association claiming it's inappropriate for influential teams like the All Blacks to be marketing sugary drinks to children when New Zealand has such "appalling" oral health.
The Association says more than half of New Zealand children have rotten teeth and 35,000 kids have had one or more rotten teeth removed last year -- with sugary drinks the worst culprits.
Mr Dunne concedes some items are unhealthy and shouldn't be promoted, but warns against an overreaction.
"I think it’s a bit of a stretch still, to go to the point of saying Gatorade or any other product particularly sponsoring the All Blacks, for example, has an influence on children," says Mr Dunne
"I think it has some influence, whether it's a detrimental and negative influence. I think the jury's still out on."
Labour is also wary of the Dental Association's sponsorship idea, but sees value in the organisations other proposals of a sugar tax and stickers that clearly display the amount of sugar content in products.
Associate Health Spokesperson for Labour, David Clark, says there is a growing body of evidence that a sugar tax is the best way to address the issue, but an industry-led approach would be the quickest way forward.
"The current Government seem unwilling to interfere where industry is being slack," says Mr Clark.
"It's unclear why the National Government won't intervene for the sack of children's health, whether it's because of their own industry ties or a particular ideology, it simply won't fix the problem."
Labour is set to release its position on a sugar tax and other health policies later this year.