One of Bay Dreams' organisers, Mitch Lowe, has apologised after a blackface photo of him and his brother from nine years ago resurfaced on social media.
The photo, which appeared on Lowe's brother Cam's Facebook page, features the festival director posing with a group of men who appear to be dressed up as the Jackson 5.
The men can be seen wearing bright-coloured suits, donning black afros and black paint on their faces and hands.
After appearing on his brother's page, the photo was picked up by a Twitter user who shared it along with the caption: "'New Zealand is not racist' okay luv [sic] but not one black person on that line-up."
In an apology on Facebook Lowe said he was "ultimately naive" at the time the photo was taken and that he and his friends were "unaware" of what blackface was.
He added that they thought they were dressing "as one of our favourite artists to a themed party".
"We didn't recognise what blackface was and I now know that blackface isn't a costume or something to be defended."
"[I] deeply apologise to anyone that may have found it hurtful. I certainly never intended to offend," he said.
Newshub reported that Cam blasted claims that the photo was racist and offensive, telling others to "get the f**k outta here".
"I'm the most anti-racist person around so keep those accusations to yourself," Cam reportedly wrote in a Facebook comment.
"I doubt you would have called this photo 'racist' eight years ago, just like no one else did back then when it was posted to thousands of people."
He added that blackface "would be wrong today" but emphasised that it was a joke at the time.
"It was a dress-up party eight years ago when the world wasn't so PC," he said.
It comes after Bay Dreams festival organisers being criticised for the lack of gender diversity in this year's line-up as only six female artists are featuring in the event.
Lowe and his co-director Pato Alvarez told Newshub diversity was important to them and added that they lost some big female names in the past few days before the announcement.
"We agree that more needs to be done to address the imbalance and inequality across the board in music and we are listening."