Stephen Fry covered this on QI so it must be true;
Halitosis was entirely made-up by Lambert Pharmacal, the company behind Listerine, named after Joseph Lister, the so-called father of antiseptic surgery. Weirdly the antiseptic used in surgeries was also used to clean floors and used as a cure for gonorrhoea, then as a mouthwash without changing the formula. The reason they made up halitosis was so they could sell the mouthwash, because there wasn't a need for it before, so the company made claims such as "hotel clerks say one in three guests checking in have halitosis" and "dentists say 83% of patients have halitosis".
And as TMN said, dentists will tell you that mouthwash isn't necessary for oral hygiene.
GC