A leading East Anglian farmer has criticised the 'diabolical' use of British flags on food produced in other countries, following the publication of governmental report on misleading labelling.

The Environment, Food and Rural Affairs (Efra) committee found current legislation for origin labelling has the potential to mislead consumers and recommends Defra strengthens its guidelines 'so customers know when they are buying British or non-British goods'.

Its report says while a UK origin claim for fresh meat may only be made where the animal was born, reared and slaughtered in the UK, the over-arching EU legislation still allows for meat products to be labelled with the country where the last significant change in production took place – not necessarily where the animal has spent its entire life.

The report also says Defra's published guidance allows butter and cheese to be labelled as products of the UK even if the raw milk has come from another EU country, but been processed here.

The report says this puts UK farmers at a competitive disadvantage. 'The cost of milk production is typically lower overseas which in turn warrants a lower farmgate price,' it says. 'This removes the incentive for supermarkets to buy cheese produced using UK-sourced milk and gives consumers the false impression that they are supporting British dairy farmers.'

The report adds: 'There is growing interest in provenance of food and British products. It is unacceptable that consumers cannot buy British in confidence and could be misled as to country of origin when they are buying food from their supermarket. It is essential that labelling on produce is improved.'

Andrew Blenkiron, estate director for the 11,000-acre Euston Estate on the Norfolk-Suffolk border is vice chairman of the Red Tractor Assured Food Standards Board.

'I think it is diabolical,' he said. 'It is incredibly disappointing that the consumer is being misled by believing that a union flag means it was produced here, when in reality that's not the case.

'It comes down to the individual retailer to make the consumer aware of what that union flag means. At the moment it does not guarantee anything.'

Mr Blenkiron said the best way for consumers to guarantee the British provenance of their food was to choose labels featuring the Red Tractor, an assurance scheme which is rigorously audited throughout the supply chain.

Andrew Opie, the British Retail Consortium's director of food and sustainability, said: 'We agree with Andrew Blenkiron that consumers need clear information on origin which is why we developed the labelling guidance six years ago. We can assure him all major retailers only use a British flag on cheese or milk if the milk used to produce it comes from British farms.'