A father from Queensland said he and his family went to a children's birthday party at a pool on Sunday and applied the sunscreen "head to toe".
"We went for a swim 15 to 30 minutes after applying, dried and immediately applied again," Tate told 7NEWS.com.au.
Photos show Tate and his wife with bright red skin.
"People refer to it as acid. You may as well cover yourself in vegetable oil," he said.
The Ombra sunscreen has 54 one-star reviews out of a total of 67 reviews on the ALDI website.
"Used this once and would never use it or recommend ever. Face felt like I had acid on it. My face was red and burned for hours after," one woman wrote.
Another said: "I reapplied twice and was in the sun for a few hours at most and I got absolutely roasted. It's criminal to sell this product with the intensity of the Australian sun!"
One man claimed a magnifying glass would offer better SPF protection and another said his children were left in pain.
"It should be more appropriately named basting oil," one man wrote.
"My children can't sleep, they have severe blisters, swelling and are in constant pain."
"We are always concerned to hear if a customer has experienced issues with our products and we will thoroughly investigate any complaints," the statement said.
"We can confirm ALDI Ombra sunscreens are extensively tested to ensure they meet best practice, safety and industry standards before they become available to customers.
"They are regulated by the TGA Australia (Therapeutic Good Administration Australia) and ALDI adheres to all their requirements.
"As outlined on the product labels, ALDI Australia recommends customers carefully follow application instructions to achieve optimum protection, including reapplying often enough and using the adequate thickness."