Weight-loss programs and products will have to prove that they can help people keep off the kilos long-term as the Federal Government cracks down on the 414-million dollar-a-year industry.
The Kevin Rudd Government's Preventative Health Taskforce is understood to have called for the weight-loss industry to be regulated in a report handed down last month.
It follows growing evidence that diets may actually be adding to the obesity crisis, as overweight people lose weight rapidly while following programs, but quickly put it back on after they stop.
The taskforce said that young women in particular were spending hundreds of millions of dollars a year on such programs to manage their weight.
Despite this, the nation's obesity rate was climbing with more than 60 per cent of adults now overweight or obese.
While weight-loss programs and pharmacy-based meal replacement programs were popular, the task force said there was limited data to show they were actually effective.
It wants a wide-ranging review of diet products and a common code of practice drawn up covering the cost, the training of counsellors and the promotion of the diets.
The Dietitians Association of Australia is backing the recommendation.
According to the Daily Telegraph, a spokesman said all commercial diet programs should be assessed by a body of experts similar to the Therapeutic Goods Administration, which assesses drugs for safety and efficacy before they can go on sale.
The association said regulation should require businesses marketing a diet program to provide evidence to a panel of experts showing what percentage of those who used the diet kept the weight off two years after starting.
Chief executive Claire Hewat said a good diet would result in weight loss of about half a kilogram per week.
"If you can lose 5 per cent of your body weight you are doing really well," News.com.au quoted her as saying.
"Diets are not the point, it's lifestyle change that is needed," she stated.