The cinema advert, shown before 12A-rated films in December, showed a pig running around in a field with a voiceover saying she was doing a dance of joy because she was outdoors for the first time after being rescued by the charity.
Subsequent footage showed pigs in small or very crowded pens with the voiceover saying: "It’s something most pigs will never know as 90 per cent are factory farmed. Set them all free. Try vegan."
The trade body the National Pig Association and seven members of the public complained to the regulator that the advert was misleading because they believed it featured farming methods that were no longer allowed in the UK. They challenged the claim that 90 per cent of pigs were factory farmed.
In an adjudication published today, the ASA said viewers would interpret the advert to mean that pigs that were intensively or factory farmed would be kept most of the time in conditions similar to those shown in the indoor footage in the advert.
It also found that consumers would interpret the advert to mean that 90 per cent of pigs in the UK would never experience the outside environment, which was not in line with government guidance.
Both of these claims could not be substantiated by Viva! and were misleading, the ASA ruled, saying the advert should not appear again in that form.
A third complaint, that the advert was likely to cause distress without justifiable reason, was rejected by the regulator.
In a lengthy response, Viva! said the ruling was disappointing and suggested the animal agriculture industry was desperate to conceal the truth about farming in the UK.
The charity said that the 90 per cent figure used in the advert to indicate the number of pigs reared inside was, if anything, vastly underestimated.
"The complaints about the advert did not question whether pigs are confined to the extent that they are unable to move, nor did it question whether pigs were kept in squalid conditions," the charity’s statement said.
"Instead, the NPA questioned our integrity in hopes of convincing the public to ignore our campaign. The farming industry is shrouded in a web of lies and smokescreens, and the public has the right to see the truth."
A poster advert from the charity displayed on buses in September 2017 was banned by the ASA in March after the regulator found that Viva! was unable to substantiate claims that hormones in milk from cows were linked to cancer.