Prime Minister Jacinda Ardern has ruled out a sugar tax but says food and drink labelling needs to be overhauled - as National warns of grocery bills being hiked.

In an interview published in the Herald today, Associate Health Minister Peeni Henare said he would lobby his colleagues to consider radical steps such as forcing up the price of unhealthy food and drink.

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"I've been approached by people who want to talk about a tax on sugar and fizzy drinks and those things," he said. "Those are all parts of the consideration that we have got to have."

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Ardern was asked about Henare's comments at her weekly press conference, and said a sugar tax had already been publicly ruled out and was not being considered.

"What we have, of course, addressed and acknowledged - as the Minister does - [is that] we have to deal with... the high presence of sugar across a range of foods.

"You'll find large amounts of sugar in a range of products, be it cereals, be it even ketchup and toppings that people are using. Ultimately we need the food sector to be making moves in these areas. That's a piece of work that the Ministry of Health has been undertaking with industry so that it goes well beyond sugary drinks."

Asked if she would consider health warnings on junk foods, Ardern said "food labelling is an option that we should look closely at".

"We have to look at ways to reduce sugar content, first and foremost, and then we secondly have to make sure that consumers have good information."

A new food labelling system is currently being developed, with the work being led by Food Safety Minister Damien O'Connor.

Earlier, National's economic development spokesman Todd McClay seized on Henare's comments, saying the Government wanted further taxes, despite announcing a bumper $7.5 billion surplus.

"The Government has legislated for an extra $1.7 billion in fuel taxes and now it wants to hike up your grocery bill," McClay said.

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Henare spoke to the Herald shortly after the Ministry of Health confirmed diabetes-related amputations hit a record 1067 in 2018, a 22 per cent surge over five years. More than 300 diabetics went on to dialysis last year alone, and the disease blights the vision of more than 60,000.

Nearly a quarter of a million Kiwis have diabetes, and another 100,000 are thought to be undiagnosed. About 90 per cent have type 2, the sort mostly brought on by lifestyle and linked to obesity.

Some DHBs have called for the introduction of a sugar tax, and health workers at the coalface say drastic action is needed to address the slowly-unfolding crisis.

The Tāmaki Makaurau MP said he was committed to "turning the tide" on diabetes: "It's affecting my people. Not just in the electorate, I mean Māori people, Pacific people."

Growing up, speakers on Henare's marae in Northland would be missing a limb, and tell him and other children tall tales about shark bites or other events.

"It was something that wasn't discussed. But you knew it was there. I know these people, I know them well, I'm related to them. Having seen the impact on them as individuals and their families... it was huge."

Henare, whose Associate Health portfolio includes responsibility for diabetes, said a major education campaign on the dangers of diabetes could be needed, as seen with other health issues like smoking. Other action would also be needed, he said.

"The smoking cessation campaign had blunt tools and it had sharp tools in its arsenal that really made a significant difference. And I'm seriously of the opinion that that's what it's going to take for diabetes."