The Local Choice milk is described by the supermarket as supporting 'small local farms near to where you live'. The Heart of England milk, however, is produced on farms in Lincolnshire and Derbyshire but is being sold in Hereford.
Tesco defended the move by saying there is no legal definition of 'local' and that the word means different things to different people.
The tactic was blasted by retailer Nigel Dowdney, who runs a 'Localise it' campaign in support of local stores and businesses. He commented: "Independent retailers do 'local' much better than the mults; they need to realise this and hold onto the advantage."