Tesco has said it made a mistake when it described chicken sold under its Willow Farm brand as “reared exclusively” for the supermarket chain, after undercover footage of a processing plant showed packs of drumsticks returned by Lidl being repackaged as Willow Farm products.

The UK’s biggest retailer has removed the claim that Willow Farm chicken is “reared exclusively for Tesco” from its website after film obtained as part of a Guardian and ITV News investigation into poultry giant 2 Sisters Food Group (2SFG) showed packs of Lidl drumsticks being opened and emptied back on to the production line. The drumsticks then re-emerged at the end of the line, repackaged with Willow Farm labels and destined for Tesco’s shelves.

“The Willow Farm brand is exclusive to Tesco and this is clearly marked on our packaging,” said a Tesco spokesman. “The wording on our website unfortunately was incorrect and we have already removed it. We sincerely apologise to customers for any confusion this may have caused.”

Lawyers from Schillings, speaking on behalf of 2 Sisters, said: “The Willow Farms brand is exclusive to Tesco, but the raw material is not.”

Willow Farm is one of seven so called “farm” brands launched by Tesco last year to stop customers defecting to cheaper rivals Aldi and Lidl. The use of fake British-sounding farm names, such as Woodside, Willow and Boswell was controversial from the outset with the National Farmers’ Union pointing to the abundance of real farms in Britain.

Retailers can return chicken to suppliers for a variety of reasons including packaging and labelling errors. It does not mean it is unfit to eat. However, if older meat is mixed with fresher meat, the use-by date should reflect the age of the oldest meat in the batch.

Play Video 3:38 Undercover inside the chicken factory – video

The Guardian investigation found evidence of 2 Sisters workers altering the slaughter date of poultry, raising the risk that shoppers could end up buying meat past its use-by date. It also captured workers dropping chicken on the floor of the processing plant and returning it to the production line.

In a statement Schillings, 2 Sisters’s legal advisers, told the Guardian: “2SFG meets the raw materials specifications for the Willow Farms brand.”

Tesco said it took the allegations against 2 Sisters extremely seriously and was carrying out its own “rigorous” investigation into the issue.

“The Food Standards Agency has conducted an initial inspection which did not find any current breaches, however we will continue to review their findings as well as our own,” continued the spokesman. “To provide additional assurance to our customers we will also be putting in place further quality measures at the site while our investigation continues.”

The Tesco boss, Dave Lewis, a marketer who spent most of his career at consumer brands giant Unilever, has always defended the no-frills farm brands which span meat, poultry and other produce, and have been a big hit with shoppers. Willow Farm chicken drumsticks are the cheapest on sale in Tesco at £1.99 per kilo. Free range, corn-fed drumsticks, sold under its top house brand Finest, cost more than twice as much at £4 a kilo.

Last year Lewis insisted that customers were “savvy” about how marketing worked. He added: “Do they come from farms? Yes. Can one farm satisfy all the demand from Tesco? No. The product truth is absolutely right.”