Freshways has defended its milk-sourcing policies after the company imported liquid milk from Belgium to sell to its British customers.
An independent processing dairy with distribution centres in London, Cardiff, Manchester and Leicester, Freshways provides milk for some high-profile companies and restaurant chains, including restaurants owned by TV chef Jamie Oliver.
However, angry dairy farmers had contacted Farmers Weekly expressing concerns that Freshways had been sourcing some of its milk from Belgium.
In a statement, Freshways, Britain's largest independent dairy, admitted it had bought milk off the spot market from a British broker.
However, the company denied any knowledge that a proportion of the milk had been transported from Belgium.
"We actually bought this milk off the spot market from a [British] broker, paying British pounds," said a spokesman for Freshways. "He sent us the milk as part of the contract. To put it into context, it was four loads in a whole week when we purchase around 175 tankers a week direct from British farms.
"We have made our concerns clear to the broker and we are no longer receiving this."
Freshways, which has the Red Tractor quality assured logo on its milk, said it had told the broker that in future it would no longer accept any milk that was not produced by British dairy farmers.
The company said it would often turn to a broker to secure its milk supply at quiet periods during the year when it was not receiving enough supply from British dairy farmers.
"Every single farm is contracted to a company and you cannot just pick up the phone if you are short of milk," the spokesman explained.
"This is because farmers will already be signed up with other companies, such as Arla or Dairy Crest. The only thing you can do is buy the milk from a broker and supply it from him."
Freshways said the story had been "blown out of proportion" and it was not routinely "picking up the phone and buying milk from Belgium".
Freshways also defended the price it paid farmers for milk, of around 28p/litre.
"Freshways is not large enough on its own to influence or control the prices paid to farmers. Even though we want to pay more to our farmers and fully support the Farmers Action we cannot pay more than what the larger dairies pay as they will just put us out of business," said the spokesman.
"We operate what I feel is a very fair system in relation to what is offered by other dairies. Our price paid is based on a basket average of what the larger dairies pay.
"If the large dairies put the price up then so does ours automatically. Our position has always been that we are happy to pay on a cost of production as long as all dairies are prepared to do so."
However, Nick Everington, chief executive of the Royal Association of British Dairy Farmers (RABDF), said there should be no excuses for importing milk when British dairy farmers could produce enough here.
"If Freshways paid farmers a reasonable price for their milk and gave them a profile for when they wanted it, then farmers would gear up to produce enough milk for them. Therefore, there should be no need to purchase milk from abroad."
Mr Everington added that he was concerned by reports of increases of liquid milk imports into the UK and the knock-on effect on the environment at a time when the dairy industry should be trying to reduce its carbon footprint.
Anita Roberts, head of assurance at Red Tractor, said: "The integrity of our Red Tractor brand is important to us and we have a system of regular checks in place to ensure that the Red Tractor logo with the union flag is only used on products from assured British farms.
"We have also received written assurance from Freshways that the milk in question was not packed or put into the supply chain carrying our Red Tractor logo."
More on this topic
See our milk crisis page