A farmer-owned co-operative dairy has been fined £3,500 for re-labelling Irish and Canadian cheese as Welsh.
Foreign cheese was repackaged as Welsh brands
South Caernarfon Creameries, based near Pwllheli, admitted seven charges of applying a false trade description.
Ex-chief executive of the company, Gareth Hockridge, was fined £500 after admitting one similar offence.
Pwllheli Magistrates Court heard on Friday that the company imported 200 tons of Canadian cheese and 180 tons from Ireland to meet orders.
'No financial gain'
Prosecutor John Roberts, for Gwynedd Council, said an unknown amount of Canadian or Irish cheese was packaged by the dairy as Caws Llyn or other Welsh cheese.
The court heard that it was impossible to know how much foreign cheese was repackaged with labels suggesting it had been made in Wales.
Gwyn Jones, defending the creamery, which has 175 employees, said : "There was no deliberate attempt to mislead.
"Quality and food safety were never compromised and no financial gain made."
He said no more than 60 tons of the Canadian and Irish cheese were used and added that "silly decisions" were made.
South Caernarfon Creameries said it has now stopped buying cheese from outside Wales.
The allegation against Mr Hockridge was that Canadian cheese had been repackaged as Old Shire Cheese with a map depicting part of the old county of Caernarfonshire and the names Nefyn and Pwllheli visible on the label.
Huw Edwards, defending Mr Hockridge, said he did not consider using the label was deceitful.
"He acted conscientiously and honestly," Mr Edwards said.
South Caernarfon Creameries - a co-operative with 190 members - was fined £3,500 with £3,000 costs, while Mr Hockridge was fined £500 plus £250 costs.
After the case, the creamery's new chief executive, Richard Elmitt, said: "We apologise to our customers for inadequacies in our procedures that led to some of our products being mislabelled.
"We acted as soon as the problems came to light and we have cooperated fully with the trading standards department.
"These incidents occurred over 18 months ago."
Dilys Phillips, head of Gwynedd Council's administration and public protection service, which includes trading standards, said: "Hufenfa De Arfon (South Caernarfon Creameries) is a well-respected local company which plays an important role in the economy of Gwynedd.
"It is most unfortunate that the trust in the authenticity Welsh products should have been put at risk."