The farmer-funded DairyNZ said it will not appeal against an Advertising Standards Authority (ASA) decision that backed a Greenpeace ad attacking the industry's record on water quality.
DairyNZ laid a complaint against the Greenpeace ad with the ASA on the ground that it was misleading, but the authority ruled early this year that it was truthful.
The ad showed children splashing in clean water and urged Kiwis to petition the Government to clean up waterways poisoned by the dairy farming industry. "More than 60 per cent of monitored rivers are unsafe to swim in," Greenpeace said in the ad.
"Water supplies are being polluted by industrial dairy farming and massive irrigation schemes," it said.
DairyNZ said in a statement it was disappointed the ASA did not uphold its complaint.
"DairyNZ has decided not to appeal, even though we know that the advert is misleading and hugely unfair to the dairy sector," DairyNZ chief executive Tim Mackle said.
Mackle said the authority had accorded Greenpeace a greater level of freedom of expression in their advertising than that given to standard advertising.
"We also note that there have been very few successful appeals to the ASA against this form of 'advocacy advertising' where opinion-based messages are presented as fact," Mackle said.
Listen to Dominic George interview Dr Tim Mackle above
He said the attacks on dairy farmers by Greenpeace amounted to scare-mongering, and unfairly blamed dairying as the single polluter of rivers and drinking water in New Zealand.
"While farmers are extremely proud of the game-changing past 10 years on dairy farms, we do know there is more to do - no one is denying that," he said.
"Dairy farmers are on a journey to turn around what has been 150 years in the making as a result of activity that includes deforestation and urbanisation, as well as farming," he said.
The sector is part of an initiative called the Sustainable Dairying Water Accord, a public agreement that is independently audited, covering dairy farmers, dairy companies, central government, regional councils and the Federation of Maori Authorities.
Dairy farmers have spent over $1 billion so far on on-farm effluent management systems, fencing waterways and building bridges. They have also planted millions of trees in significant riparian planting and wetland revegetation projects, Mackle said.