Sainsbury's decision follows the publication by the UK's food regulator earlier this month of a uniform nutritional labelling scheme for packaged products.
The industry body disagrees with the Food Standards Agency's (FSA) system despite support from consumer groups. The dispute has caused confusion amongst consumers who are now faced with the prospect of competing systems.
Groups such as the British Heart Foundation have called for the FSA's system to be made compulsory, as they believe self-regulation does not work.
Sainsbury's said it left the consortium over comments it perceives as an endorsement of a system based on guideline daily amounts (GDA) as used by rival supermarket Tesco.
The company stated its decision is based on the consortium's inability to represent its members effectively on contentious issues.
The FSA's system is not mandatory but has been taken up by several companies as has the GDA method.
Earlier this month the FSA approved the colour coded 'traffic light' system, which is intended to harmonise nutritional labelling across the country.
However, many manufactures pre-empted the voluntary legislation with their own GDA labelling systems, in a move to win over progressively more health conscious consumers.
Sainsbury's itself uses its own 'wheel of health' system, which is an adaptation of the FSA's colour coded system in the shape of a circle.
The European Commission is also looking at a harmonised nutritional labelling system for the bloc in a bid to end consumer confusion. A consultation on various proposals was launched earlier this month.
The FSA has in turn launched a consultation on the Commission's proposals.
The Commission's proposals include a section on nutrition labelling. This area is currently regulated by Directive 90/496/EEC, making such labelling optional unless a nutrition claim is made by the manufacturer on the package or in the advertising of a foodstuff.
The directive also lays down a standardised format in which nutrition labelling must be presented. However nutrition labelling varies between member states, with many companies voluntarily providing this information.
Key players in the UK will meet in April to discuss the rationale for labelling legislation and the future scope and structure of food labelling legislation.
The ingredient listings of alcoholic drinks and the EU's country of origin labelling will also be discussed.
Until any mandatory legislation is introduced either by the FSA or EU further confusion in the market can be expected.
The FSA's traffic light system will use green, amber and red to signal whether foods contain low, medium or high amounts of fat, saturates, sugar and salt acting as a 'signpost' for foods.
The system will use nutritional criteria developed by the FSA to determine the colour code.
The system developed by industry, GDA, indicates the percentage of recommended levels of such ingredients an average person should ingest each day.