The study found that the response of most companies to World Health Organisation guidelines on fighting obesity, cancer and heart disease was 'lukewarm'.
"There is a pretty poor overall picture, with too many companies appearing not to care a jot," reported the City team, which comprised Prof Tim Lang, Dr Geof Rayner and Elizabeth Kaelin.
"The findings of this report suggest that the world's food companies are not yet fully engaged with the seriousness and urgency of the demands to tackle diet-related ill-health worldwide."
The City team studied the annual reports and accounts of the top 10 food manufacturers, top 10 food retailers and top 5 foodservice companies. The firms were rated for whether the companies were doing anything about the health agenda agreed by the world's governments at the World Health Organisation.
"The research is the first attempt to monitor whether and how these powerful companies are reporting on their impact on diet and health," said the City team.
"Our findings are worrying."
But food industry bodies have been quick to respond, arguing that the sector is fully aware of the health challenges ahead.
"If the report's authors want the food and drink manufacturing industry to take more action on food and health, they are pushing at an open door," said a Food and Drink Federation (FDF) spokesperson.
"FDF's Food and Health Manifesto is a clear demonstration of industry's commitment to helping tackle the problems surrounding food and health."
The federation claims that the UK food industry has been highly active in putting into effect the FDF's Food and Health Manifesto, which includes pledges to reduce levels of salt, sugar and fat in foods and promote healthy lifestyles. The FDF cites the fact that products worth almost 33bn will have full nutrition information on pack by the end of 2006, and that compared to 2004, products worth 7.4bn had a lower level of salt by the end of 2005.
"Industry has long recognised its responsibility in this area and will continue to work with Government, educators and consumers to help tackle the problems surrounding food and health," said the spokesperson.
Indeed, the City report accepts that food manufacturers, who have been under intensive attack for selling fatty, salty sugary foods, have responded most effectively within the sector. But it argues that this is the result of constant pressure.
"This suggests that the best way to get companies to take health seriously is to have critics outside giving them a hard time. The critics are unpaid watchdogs. Eventually the companies wake up," said Tim Lang, Professor of Food Policy at City.
"But if companies keep their heads below the parapet, no health innovation or consciousness seems to take root inside corporate culture."
Furthermore, the report points out that only 10 out of 25 companies reported that they were acting on salt: Cadbury Schweppes, ConAgra, Kraft, Nestl, PepsiCo, Unilever, Ahold, Carrefour, Tesco and Compass.
Only five reported action on sugar. Four were manufacturers: ConAgra, Kraft, PepsiCo, Unilever, plus only one retailer: Ahold.
Only four reported action on fat - Kraft, PepsiCo, Compass and Yum! while eight reported action on transfats: Cadbury Schweppes, ConAgra, Danone, Kraft, Nestl, PepsiCo, Unilever and Ahold.
"Companies should be wary about doing the minimum or presenting a few hurried initiatives in self-promotional terms," said Lang.
"A lukewarm response from food companies to the enormity of the public health evidence amassed by the WHO and researchers risks engendering some cynicism. Company actions must move from being purely defensive or centred on obviating threats to their reputations."
The Report 'The Food Industry, Diet, Physical Activity and Health: a Review of Reported Commitments and Practice of 25 of the world's Largest Food Companies' published by the Centre for Food Policy, City University is available on the website: www.city.ac.uk/media.