The justification for the move from “English” to “British” butter is that some small but unspecified portion of of the milk used in production comes from outside England and therefore it makes more sense to label the product as British. To describe it as “made in England with British milk” would be too confusing for the tiny minds of the public at large.
Personally I’d be happy with just “made in England”.
And remember Dairy Crest's assertion that the Union Flag, the flag of the odious British National Party, has more positive associations than the English flag:
A British claim enables us to credibly use the British flag within communications without causing confusion. The British flag has a more positive association with consumers than the English flag.
Boycott anti-English/anti-England Dairy Crest - here's some more of their products to avoid:
Cathedral City Cheese range, Vitalite margarine, St Ivel spread range, Willow, Golden Churn, Clover, Utterly Butterly, Frijj milkshakes.