US corporation McDonald's has been slammed for its latest promotional campaign in Brazil, its eighth largest market. As the nation readied to celebrate national Children's Day, the burger giant marketed a range of dolls to come free with set children's meals, which were allegedly produced using child labour.

When local magazine Carta Capital alleged last month that underage workers were being employed in one of the plants making the dolls McDonald's undertook an audit, but its results were inconclusive. On 27 September, the company released a statement that "although the auditing firm hasn't caught anyone in the act of using child labour at the plant, it (the auditor) concluded there aren't enough controls at the factory to refute [allegations that underage workers are employed at the factory]".

McDonald's responded by terminating its contract with one of two subcontractors hired to produce 3.5m dolls, but now further allegations have dogged production at the remaining contractor, the Rosario Cooperative factory in Maranhao state. Plant manager Eunice Teixeira has admitted that about ten children were told to leave the factory before the audit was undertaken, but since then McDonald's has said that a visit to the site by Brazil's Ministry of Labor failed to find any underage irregularities.

Jose Carlos Vidal, McDonald's communications director, told Dow Jones Newswires: "The promotion was launched because there were no children seen working at the factory [in question]." Furthermore, work continued because, "we didn't want the nearly 2,000 adults at the factory to lose their jobs".

Several franchisees have raised concerns over including the dolls in the promotion, however. Highly decorated franchisee Jacques Rigler told Dow Jones Newswires: "I told them in a letter that I no longer wanted to sell the dolls, but McDonald's told me I'd already made the order, so I couldn't cancel it." McDonald's has denied preventing the cancellation however.

This is not the first time McDonalds has found itself in the spotlight over child labour allegations. A year ago, media reports highlighted scores of underage workers at a Chinese factory that supplied McDonald's with toys. They were subsequently fired.