Dairy NZ is not ruling out making further complaints, if an environmental group continues to blame the sector entirely for water pollution.
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The organisation was one of 12 to complain to the Advertising Standards Authority about a Greenpeace ad that points to dairy farming polluting rivers.
The authority rejected all the complaints, saying the ad needs to be considered in the context of advocacy and opinion.
Last month, Dairy NZ announced it was planning to appeal that ruling, but its chief executive, Tim Mackle, has now decided against it.
"At the end of the day we felt that we didn't have a strong chance of winning the appeal, their track record with appeals is very low ... and based on all of that we thought that there was no point in appealing at this point.
"We want to get on and help farmers continue to make improvements around responsible farming."
But Dr Mackle said Dairy NZ would not hesitate to complain again if it felt the dairy industry was being unfairly attacked.
"We felt this time that we did need to lodge a complaint about something we felt was grossly misleading and unfair towards farmers because it didn't recognise the great effort that was going on and it unfairly blamed dairy really for all of New Zealand's water quality issues.
"If that situation crops up again then we'll have to make a decision. But we can't rule out future complaints. If you attack an industry you should back it up with very solid facts," Dr Mackle said.