Most of it ends up in fish and chip shops.
Several American states, including Alabama, Louisiana and Mississippi, have rejected basa after tests showed some fish were contaminated with banned antibiotics.
But Joyce Misa of Simplot, which owns Birds Eye, said the fish was safe to eat and perfect for the New Zealand market as it was a moist, white fish with no bones.
"It is a competitively priced and tasty product," Misa said.
"It is checked by the manufacturer, Ministry of Agriculture and Fisheries and Australian Quarantine and Inspection Service."
Misa said the product had received mostly positive feedback, apart from a few concerned customers who had been "misled by negative publicity and misinformation".
Misa said the basa used by Birds Eye was processed in Can Tho, Vietnam, near the Mekong River - but no river water was used in the processing facility.
But Andrew Talley, of Talleys, said the increased use of the fish was robbing New Zealand fisheries of business and he believed the fish was not safe to eat.
"Basa is farmed in the Mekong Delta, one of the most putrid and polluted waterways in the world, and uses slave labour in its production," Talley said. "If people knew how it was farmed, what it was fed and how it was produced they wouldn't eat it. I wouldn't use it as animal feed." Talley said he would like basa imports stopped but the companies should at least have to label food type and country of origin.
"People have no idea what they are putting in their mouths and that is not right."
Talley wanted basa on a "level playing field" with locally sourced fish.
"Vietnamese catfish is processed without environmental regard, poor environmental responsibilities and slave labour rates," Talley said. "We cannot compete against that."
In 2008, the New Zealand Food Safety Authority tested a commercial consignment of basa and recorded trace amounts of gentian violet, a medicine for pets.
Lisa Gibbison from MAF said there had been surveillance testing of the fish since and no contamination had been found.
