Vietnam will continue to restrict foreign investment in tobacco production, only allowing foreign companies to partner with local producers, the Vietnam Economic Times reports.
The report cited a recent Industry and Trade Ministry's decision as saying that the government will continue to hold a controlling stake in tobacco companies with new foreign investment.
These companies are not allowed to expand their production capacities from what was previously approved by the authorities.
They also have to report their production and material imports to the ministry every three months.
Vietnam used to ban all private and foreign companies from tobacco production as the government wanted to keep tobacco supply at a reasonable level in the market.
This changed after the country became a member of the World Trade Organization. Tobacco producers, however, are still subject to strict regulations.
Known as a country one of the highest smoking rates in the world for adult men, Vietnam plans to impose heavy environment taxes on tobacco from 2012 onwards.