NEW Zealand corn was sold in an Australia Day package draped with the Australian flag.
The corn was the product of Golden Circle - which has a logo in the shape of a map of Australia despite being owned by US company Heinz - and was sold by supermarket giant Coles.
It was sold as part of Coles's Australia Day promotion and carried the words "Only at Coles".
Peak vegetable body AusVeg public affairs manager William Churchill said he was "surprised that such a blatant breach of our labelling system slipped under the nose of Coles, Golden Circle and the consumer, and that no one has reported the breach to the authorities".
"It's flat-out wrong, not to mention illegal to pass off and depict product as being Australian when the product has actually come from New Zealand," Mr Churchill said.
"Australia's vegetable growers have worked too hard to deserve being undercut by cheap imported produce masquerading as Australian."
AusBuy chief executive Lynne Wilkinson said the US Government did not allow use of its flag on products unless it had given permission to use it. "(Foreign-owned companies) are taking us for mugs," she said.
Golden Circle said: "The Australian flag is intended to indicate the product's potential use as part of Australia Day meal preparation."
Victorian Farmers Federation president Andrew Broad labelled the packaging "deceptive".