More than $260 million of taxpayers' money is invested in fast-food brands and soft drink giants.
Obesity campaigners say they're appalled at the investments by bodies such as the Super Fund and ACC and are calling for junk food investments to be banned.
Figures obtained by RNZ News show as of 31 May, New Zealand Superannuation Fund and ACC had $110 million invested in The Coca-Cola Company and its global subsidiaries and $70m in its main rival Pepsico.
A further $38m was invested in McDonalds in America and Japan, and $17m in Domino's Pizza in Britain and Australia. Closer to home, Super Fund has $27m invested the NZX-listed Restaurant Brands, which owns KFC, Pizza Hut, Carl's Junior and Starbucks in New Zealand - including $5m in shares.
All up, more than $260m of taxpayers' money was invested in global soft drink and fast food chains.
Earlier reports of figures more than $240m were incorrectly calculated.
Dental Association spokesperson Rob Beaglehole said he was shocked to learn of the government's investments.
"New Zealand is the third-fattest country and has the third-highest consumption of sugar in the OECD, after Mexico and the United States. The number one source of sugar for those aged 30 and under comes from sugary drinks."
Investments in sugary drink manufacturers and fast food companies should not be allowed, Dr Beaglehole said.
"It is totally inappropriate for the government to be investing in companies whose products are causing so much harm to New Zealanders. These products are a major contributor to tooth decay, type two diabetes and obesity," he said.
Medical association chair Stephen Child said the government needed to decide for itself whether to withdraw from such investments.
"I think it's a decision that obviously they need to make, but I do think that we need to have some clear guidance, and we need to see investments statements from ACC be clear about this - for example the Medical Association, we don't think that we should be investing in products that are unhealthy products."
Dr Child said the government was torn between consumer choice and what is best for society.
The Ministry of Health spends $60m a year on obesity prevention programmes, including Kiwisport, Green Prescriptions and Fruit in Schools.
Around $40m a year is spent providing dental care to children, and an estimated $25m is spent extracting rotten teeth from children under general anaesthetic.
The government stopped investing in tobacco companies in 2007 because of the recognised danger to public health.
FIZZ founder and Auckland University epidemiologist Gerhard Sundborn said sugar was just as addictive and dangerous as tobacco.
"The evidence does show the highly negative impact that sugar and sugary drinks has on type two diabetes and obesity."
The government's investment in these types of companies sheds a light on why the government might be reluctant to support a tax on sugary drinks, he said.
"It seems as though the government has a stronger allegiance to big business rather than the health of the public," he said.
The government should divest itself of its investments in soft drink and fast food companies, Mr Sundborn said.
Auckland University Professor Boyd Swinburn, an obesity expert and long-time campaigner, agrees. The health of the population should be put before profit given New Zealand's obesity epidemic, he said.
"A divestment strategy is one that is logical and is concordant with health policy, so there's no reason why they couldn't go down the path of divestment even if they're still considering whether to do a sugary drinks tax," he said.
A Super Fund spokesperson said while it recognised nutrition was a public health issue it had no plans to put any sugar or fast food exclusions in place.
"We have engaged with a number of companies on this matter and will continue to do so. We are not aware of any mainstream funds which are excluding companies on these issues," the spokesperson said in a statement.
They would not say which companies it had spoken to, or what the discussions were about.
Super Fund has an A+ rating for its overall approach in the global United Nations Principles for Responsible Investment benchmarking assessment last year.
"Our current priority issues for our engagement programme are severe environmental issues including climate change, bribery and corruption and human rights," it added.
Green Party Finance spokesperson Julie-Anne Genter said she understood why the SuperFund would want to invest in highly profitable companies, and the government should look at public policy around health.
"What is profitable isn't necessarily what is best for human health and well-being so there really is a need for governments including New Zealand's to look at public policy options for ensuring that junk food companies are not making big profits at the expense of human health."
The Green Party said the investments fit within the current ethical guidelines.
ACC said it also followed the UN Responsible Investment guidelines.
The UN Responsible Investment Principles do not dictate what kind of investments should or should not be allowed. Those signed up to the principles must be aware of the potential impact of any decisions that are made.