I know of a similar issue occuring at my work last year, except it was with a guy in our group with notoriously bad breath.
Someone told our team lead and a "business etiquette" topic was added as an agenda item on our next monthly team meeting.
This gave the boss a chance to address general etiquette issues and bring up the topic of personal hygene anonymously. He did a great job mixing it with other stuff, like email etiquette, dress code, meeting etioquette, timeliness, etc.
It worked really well and brought the issue to the table without direct confrontation.
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