Cymru Dairy has rejected claims its use of the Welsh dragon contravened Trading Standards rules.

Officers from Trading Standards in Cardiff had told Cymru that the use of the dragon on milk implied all the milk was produced in Wales, according to Cymru business development manager Tudor Davies. However the company never advertised the milk, some of which was produced in England, as Welsh, and merely used the logo to flag up the Welsh business, he insisted.

Following the collapse of Dairy Farmers of Britain Cymru had picked up new suppliers in the principality, meaning it was now able to supply 100% Welsh milk to customers, Davies added. "We are in the process of redesigning the labels now we are self-sufficient in Welsh milk. We expect to have that ready in a couple of months."

The Welsh dragon is expected to feature on the new packaging.