Police are investigating a complaint after a carnival float was "considered racist" as it featured people who had painted their faces black.
Aberaeron's bank holiday carnival had a float based on Jamaica's bobsleigh team from the film Cool Runnings.
A Labour Party member in Ceredigion called the incident "unacceptable".
Dyfed-Powys Police said it had received a report "of a perceived hate incident". Carnival organisers have been asked to comment.
Dinah Mulholland, Labour's candidate for Ceredigion at June's General Election, said: "There may have been no conscious agenda or racist intent towards involved people of African or Caribbean heritage in the Cool Runnings float.
"But there is no doubt that offence has been caused and that there is a danger that, unchallenged, such behaviour makes casual racism seem okay."
Ms Mulholland said people painting their faces black "continues to be used today to belittle and mock people of colour".
A police spokeswoman said: "Dyfed-Powys Police received a report of a perceived hate incident which occurred at Aberaeron carnival on Monday 28 August.
"An entry to the carnival parade was considered racist. Enquiries are being made by local officers."
Cool Runnings was a 1993 film loosely based on the real life story of Jamaica's first bobsleigh team to compete at the 1988 Winter Olympics.