Milk branded as local is being sold by Tesco about 150 miles away from where it was produced.
Tesco said "local" meant "different things to different people"
The Local Choice milk is described by the company as supporting "small local farms near to where you live".
But the BBC has found that Heart of England milk being sold by Tesco in Hereford is produced in dairy farms in Lincolnshire and Derbyshire.
Tesco said: "There is no legal definition of local - and local means different things to different people."
It added: "But research tells us that customers view food from their region as local - as opposed to food produced a specific number of miles away from a store."
The firm added it paid dairy farmers one of the best prices per litre in the country and as the Local Choice brand had begun last month and was in its early stages, it expected more farmers to begin supplying it.
Dr David Gregory, BBC Midlands Today's Science and Environment Correspondent, said: "Tesco are working with a co-op called Dairy Farmers of Britain.
"Although there are members of this co-op across the Midlands just 20 have been selected by Tesco to take part and they are all located around a dairy in Lincoln.
"That means if you buy Heart of England milk in Hereford, and it is on sale there, it's travelled 150 miles."
Gavin Tringham, of Birmingham City Council, said the food law guidance was that local should mean it was either "from the county in which it's produced or an adjacent county".
David Wilkinson, from Dairy Farmers of Britain, said: "The Heart of England is a big region at the moment - we may tighten it up - but it comes from the middle of England.
"The middle of England isn't actually ram-jammed full of dairy farms so it will need to be a big region."