Cadbury/Pascall says it will continue to market its Eskimo marshmallow sweets, despite a complaint from a Canadian tourist, saying they are racist.
Tip Top has also said it did not intend to rename its Eskimo Pie icecreams.
Seeka Lee Veevee Parsons, 21, an Inuit of the Nunavut Territory in Canada, said she was shocked when she found the Eskimo marshmallows for sale last week, saying there were an insult to her people.
The word Eskimo was unacceptable in her country and carried with it negative racial connotations, she says.
The correct term was Inuit, Parsons says.
"I was taken aback. When I was a little girl white kids in the community used to tease me about it in a bad way. It's just not the correct term," she says.
She also believed the shape of the lolly was an unfair stereotype of her people.
But Cadbury Australia and New Zealand communications manager Daniel Ellis says Cadbury/Pascall did not intend to rename or remove the product.
"Pascall Eskimos are an iconic New Zealand lolly and have been enjoyed by millions of New Zealanders since they first hit shop shelves way back in 1955," he says.
"They continue to be incredibly popular today. Last year, we produced almost 19 million individual Eskimos, making it one of our most sought after Pascall products.
"It has never been our intention to offend any member of the public, and whilst we are disappointed to learn that this traditional New Zealand product has caused any concern, this is only the second time in the product's 54-year history that we have received such a complaint.
"This shows that the overwhelming majority of consumers do not find Eskimos to be offensive."
"We have no intention to rename, reshape or remove the product, and trust that consumers will continue to enjoy Pascall Eskimos."
Parsons intends sending packets of the confectionery to the Canadian Prime Minister Stephen Harper and her grandfather, an Inuit tribal elder in the Nunavut Territory.
Asked what the company would do if it received a complaint from Harper, Ellis told NZPA that would be "assessed at the time."
Tip Top says a change was unlikely in the short term for its Eskimo Pies.
Eskimo Pies, a chocolate-coated ice-cream on a stick, have been available in New Zealand since the 1940s and Tip Top said it was one of their top 10 sellers.
It told TV3 it would track the feedback and if it became a big issue it might consider a name change.
Eskimo has been used as a general term in French, Russian and Ukranian for an ice cream with a wooden stick in it.
Eskimo Pie was a brand name for a chocolate-covered ice cream bar sold in the United States since the 1920s, now marketed by Nestle.