The maker of Eskimo marshmallow sweets, Cadbury, said it would continue to market them despite claims from a Canadian tourist they were racist.
Tip Top also said yesterday that 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 they were an insult to her people.
The word Eskimo was unacceptable in her country and carried with it negative racial connotations, she told the Taranaki Daily News.
The correct term was Inuit, Ms Parsons said. "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 said.
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 said 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 said.
"They continue to be incredibly popular today. Last year, we produced almost 19 million individual Eskimos."
Ms 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 Mr Harper, Mr Ellis said that would be "assessed at the time".
Tip Top said a change was unlikely in the short term for its Eskimo Pies.
Eskimo Pies, a chocolate-coated icecream, have been available in New Zealand since the 1940s and Tip Top said it was one of their top 10 sellers.