The ad watchdog divided the complaints about a TV ad, created by Euro RSCG and broadcast in February 200, and a direct mailing received in March 2009, into five categories.
The ad and the mailing both claimed that to get a daily amount of 6mg of iron a day, a toddler would need to drink 20 litres of cows' milk or two cups of Cow & Gate Growing Up Milk a day.
They also stated Cow & Gate should be used as part of a mixed diet and that it helped support healthy growth, brain development and learning skills.
The ASA has produced a nine-page ruling on the case after hearing evidence from Cow & Gate owner Nutricia, the Food Standards Agency, and an independent expert who it paid to consider the claims.
It upheld complaints on two of the five grounds, but rejected them on the other three.
It concluded the TV ad and the mailing misleadingly implied that cow's milk was "an extremely significant or the most significant source of iron for young children, whereas we understood cow's milk was relatively low in iron compared to other foods".
Secondly, it concluded that the presentation of the ad exaggerated the benefit of the product in a toddler's diet and misleadingly suggested to parents that not using Growing Up Milk could risk iron deficiency in their children.
The ASA acknowledged Nutricia's argument that EC regulations prohibited it from comparing the nutritional properties of the product with any food or drink other than milk.
It added that it noted the regulations did not prevent a child being depicted drinking the product as an accompaniment to a meal.
It did not uphold complaints that the product could not help support healthy growth, brain development and learning skills.
Cow & Gate, responding to the ASA adjudication, said in a statement: "The ASA upheld two areas: that the humorous 20l beaker of cows’ milk overemphasised the role of cows’ milk in a toddler’s diet and that the ASA felt that there should have been clearer illustration of the importance of a varied mixed diet.
"However, in reaching its conclusion, the ASA did acknowledge that Cow & Gate was following a previous ASA instruction to only feature milk in Growing Up Milk adverts; that the words 'as part of a mixed diet' were shown on screen; and that legislation prevents nutritional comparisons being made between Growing Up Milk and food.
"The advert in question was last aired in 2009, and there are no plans to use it again. The current Cow & Gate Growing Up Milk TV ad meets all ASA requirements."