Australia's consumer watchdog is taking on food giant Heinz for 'misleading' parents about the nutritional value of their toddler food.

Food that contains more than 60 per cent sugar isn't a healthy option for toddlers.

That's the message from Australia's consumer watchdog which is taking on food giant Heinz for "misleading" parents about the nutritional value of their toddler food.

The Australian Competition and Consumer Commission has started legal proceedings in the Federal Court against H.J. Heinz Company Australia Ltd in relation to its Little Kids Shredz products.

It alleges Heinz is falsely marketing these products as healthy options for young children when they are not.

"These products contain over 60 per cent sugar, which is significantly higher than that of natural fruit and vegetables - for example, an apple contains approximately 10 per cent sugar," ACCC Chairman Rod Sims said.

The ACCC also says the Heinz Shredz products are likely to inhibit the development of a child's taste for natural fruit and vegetables.

They claim they encourage children to develop a preference for sweet tastes.

Particular issue has been taken with the products' packaging, which features prominent images of fresh fruit and vegetables and statements such as `99% fruit and veg'.

Mr Sims says major companies have an obligation under the Australian Consumer Law to ensure products' health claims do not mislead the public.

The legal action was prompted by a complaint by the Obesity Policy Coalition.

Jane Martin, Executive Manger of the coalition, has welcomed the action.

"We are very happy to see the watchdog putting these products under the spotlight," Martin said.