While the rules of etiquette may dictate handling issues of other people's hygiene delicately, the situation may be different when it comes to bad breath. If someone you know chronically suffers from bad breath, you may be doing them a favor if you bluntly alert them to the situation.
The majority of bad breath sufferers are not aware of their problem. This is because it is virtually impossible to smell your own breath. Those with halitosis will be doomed to go through life without knowing that their breath is offensively bad unless someone tells them.
If you have a friend or loved one who constantly has halitosis, that someone is you. While it may seem like an uncomfortable conversation to have, you will be doing this person a favor. By alerting them to the situation, you may help them to make adjustments to their oral hygiene that could enable them to improve their breath.
Suggesting specific ways in which they can improve their breath may help you seem more constructive rather than critical. For example, mentioning specialty breath freshening products, like TheraBreath's line of toothpastes and mouth washes, may help them take steps to fix their bad breath problems.