In a new position statement, the powerful doctors' group says a suite of measures needs to be adopted by governments and businesses in 2018 to reduce the large-scale damage being wrought by over consumption of sugar.

"Improving the nutrition and eating habits of Australians must become a priority for all levels of government," AMA president Michael Gannon said.

Dr Gannon warned that eating habits are formed early on and said the continued, targeted marketing of unhealthy foods and drinks to children had alarmed doctors.

"Consumption of sugar is not a problem in and of itself but there is no doubt it is a significant contributor to the obesity epidemic that we are facing," Dr Gannon said.

Among more than 20 recommendations, the AMA also calls for businesses to provide water as the default drink, better nutrition education programs, better food labelling, more affordable healthy options for people on low incomes, and improved dietary and clinical guidelines.

"Vending machines containing sugary drinks and other unhealthy food items should be removed from all health care settings or be replaced with vending machines offering only healthy food and beverage choices," the position statement says.

It also says a tax on sweetened drinks should be introduced as a "matter of priority".

The call for such a tax pits the AMA against the Australian Beverages Council, the industry's lobby group, which last year said it was "consuming vast amounts of resources" in its fight against the push.

Responding to concerns about governments intervening in the market, Dr Gannon said there would always be individual responsibility involved in dieting - as well as parents' responsibility for children and institutions' responsibility for people under their care - but said the status quo made people vulnerable.

"The industry has shown itself to be incapable of self-regulating," he said, arguing that businesses are exploiting loopholes to target children and protect sales.

Dr Gannon said that, while sugar is not the same as tobacco because there is a safe dose, the industry had used similar "tactics of denial" in the face of research.

Poor diet is a factor in one in five deaths globally and diet is the second highest risk factor, after smoking, for early death, according to research published last year.

Last year, a coalition of 34 health organisations called for an "urgent" 20 per cent tax on sugary drinks and ban on prime time unhealthy food advertising.

A 2016 study - authored by the Obesity Policy Coalition and the University of Queensland's School of Public Health - suggested a 20 per cent levy could save 1600 lives, dramatically reduce cases of type 2 diabetes, heart disease and stroke, and raise $400 million every year.

Britain, Ireland, Belgium, France, Fiji, Mexico, South Africa, various states of the United States and other countries have instituted the tax on sugary drinks in recent years.

Dr Gannon conceded the Turnbull government had made it clear it is opposed to a sugar tax but said the AMA would "continue to make the case that the economic benefits of a healthy population" are more important than the fears of damaging Australia's sugarcane industry.