An advert claiming food sold at the Tesco store in Bangor in Gwynedd was 'local' has been criticised by the Advertising Standards Authority (ASA).
Tesco said all the produce in the advert was from Welsh suppliers
Tesco claimed the in-store advert was correct because all the "local" food it promoted was from Wales.
But the ASA upheld a complaint from a customer that "local" should only mean food sourced from the immediate area.
Tesco said it had produced the advert in "good faith" and it will continue to support Welsh produce.
But a local councillor said the advert showed an old-fashioned view of Wales as a region and not a country.
"Local to me would be Gwynedd, Anglesey and maybe part of Conwy not south Wales," said John Wyn Williams, welcoming the ASA's decision.
"They wouldn't advertise food being sold in London as local if it was produced in Manchester."
Surveys among customers in Bangor showed local sourcing was important to them, the store said.
Tesco said they also commissioned a national survey to understand how consumers interpreted the word "local".
The store told the ASA that 10% of consumers surveyed were Welsh and most of them interpreted "local" to refer to their country or region.
It also confirmed that all products featured in the advert were sourced from Welsh suppliers and told the ASA it had no plans to use the advert again again.
However, the explanation did not satisfy the ASA which decided people reading the advert were likely to interpret "local" as referring to their immediate surrounding region.
"Because the products referred to in the ad were not specifically local to Bangor, we concluded that the ad was likely to mislead readers," the ASA said.
Tom Barlow from the Padrig Vineyard on Anglesey also said the advert was "misleading".
"I think this sort of thing is unfair to local producers.
"If I read that produce was local in a store on Anglesey then I'd expect it to be produced on Anglesey," he said.
Tesco shopper Sonia Williams, from Tregarth near Bangor, said: "I always check the labels to see where produce comes from.
"I try and buy goods locally whenever I can because the further things travel the worse it is for the environment."