South Caernarfon Creameries was founded in 1938

South Caernarfon Creameries, near Pwllheli, said it was co-operating fully with trading standards officials.

The firm said it had already made changes so customers did not get the wrong impression, and had stopped buying in cheese from outside Wales.

It is not known how much longer the investigation will take.

One source has suggested that the labelling changes may have taken place because South Caernarfon Creameries did not have enough of its own cheese in stock to meet demand at the time.

The situation lasted for a month at most before the labels were changed.

I know that they have instituted changes, so I hope that this incident will be investigated fully Plaid Cymru MP Hywel Williams

Trading standards officers have also been looking at the company's record keeping.

The firm's chief executive, Richard Elmitt, said it had been working fully and completely with the investigators.

"Obviously because there are investigations ongoing, it is difficult for me to say too much more until they reach some level of conclusion," he said.

The claims relate to a short period in 2004

"But I can say that we have and are happy to work with them fully in terms of everything they have wanted to know.

"We have reviewed some of our systems, some of our procedures - the company structure, those kinds of things and we will continue to do so as part of an ongoing and continuing improvement process."

Caernarfon Plaid Cymru MP Hywel Williams said the firm was taking the issue "very very seriously".

"I know that they have instituted changes, so I hope that this incident will be investigated fully," he said.

Last year, South Caernarfon Creameries opened a �2.5m milk processing plant, securing 150 jobs.

The company, set up in 1938, has an annual turnover of �28m and supplies many leading supermarkets.