Nestle is removing its 4.5 health star rating from Milo drinking powder.
The product was given a Bad Taste Food Award by Consumer NZ in 2016 because the rating was based on the assumption the drink was being made with skim milk.
Consumer NZ chief executive Sue Chetwin said Milo on its own would only earn 1.5 stars because it was made of almost 50 percent sugar.
"It's the skim milk that boosts the number of stars," she said.
"But our research found most milo drinkers prepare the drink with standard blue top or full-cream milk."
Ms Chetwin said health star guidelines allowed companies to use the nutritional values of additional products, such as skim milk, to add to a rating.
Consumer NZ was campaigning to get rid of this loophole, she said, because it undermined the purpose of the health star rating, which was to quickly give consumers information about a product's nutritional content.
The 4.5-star rating will disappear from Milo powder in June.