The National-led Government is defending its appointment of the Food and Grocery Council chief executive to a board which will set up a new health promotion agency.
Katherine Rich has been appointed to the Health Promotion Agency Establishment Board, which replaces the Alcohol Advisory Council.
The move has outraged advocacy group Alcohol Action. Spokesperson Doug Sellman says Ms Rich has been one of the most vociferous defenders of the alcohol industry.
Professor Sellman says supermarkets normalise alcohol as an ordinary commodity and sell it by the tonne at ultra-cheap prices up to 24 hours a day.
He believes Ms Rich's appointment is a major conflict of interest and indicates the Government wants to have the alcohol industry strongly represented in its preparations for the new agency.
"Seventy percent of the alcohol that's sold in New Zealand comes through supermarkets and here we have a person in Katherine Rich who's a staunch defender of the excessive commercialisation of alcohol, particularly though supermarkets, and she's on a board that is presumably about decreasing the heavy drinking culture."
The Labour Party agrees the appointment of Katherine Rich is too much a conflict of interest.
Health spokesperson Grant Robertson told Radio New Zealand while he holds Ms Rich personally in high regard, he believes her role with the Food and Grocery Council does clash with being part of such an agency.
"I think the linkage with her role supporting and advocating for the supermarkets is unfortunate and doesn't sit well with the health promotion role that the future agency will have."
However, in a written statement on Saturday, Health Minister Tony Ryall says Ms Rich, a former National MP, was appointed for her experience, balance and integrity.
Mr Ryall believes much progress can be made with such industry engagement.