Source: Associated Press Pubdate: Thu, 15 Jan 1998 BRAZIL CO. DENIES TOBACCO CHARGES RIO DE JANEIRO, Brazil (AP) -- Brazil's largest tobacco company on Thursday denied reports that it buys, markets and exports high-nicotine tobacco grown secretly in Brazil. Souza Cruz, which is owned by British conglomerate B.A.T. Industries, said in a statement that it ``does not promote the cultivation or marketing of any variety of high-nicotine tobacco.'' The denial was in response to an Associated Press report that farmers in southern Brazil grow high-nicotine strains known as ``fumo louco'' -- crazy tobacco in Portuguese -- by the ton and sell them to Souza Cruz. The AP's investigation found that Souza Cruz created hundreds of crossbreeds based on a high-nicotine line known as Y-1, resulting in the strains known generically as fumo louco. Souza Cruz said it grew Y-1 exclusively between 1990 and 1994 and shipped it all to the Brown & Williamson Tobacco Corp., the third largest U.S. cigarette maker. After that, the company said, ``no Y-1 or any derivative of it remained in Brazilian territory.'' Gerson Cardoso, Souza Cruz's director of tobacco, said fumo louco was not related to Y-1 but to strains of a variety of Virginia tobacco that grows bigger than normal plants but has ``absolutely normal levels'' of nicotine. The company also said it uses only natural selection in developing strains and has never employed recombinant DNA or other techniques to genetically alter plants. In January, the DNA Plant Technology Corp. of Oakland, Calif., agreed to plead guilty to conspiring to grow high-nicotine tobacco secretly in foreign countries, including Brazil, so Brown & Williamson could ``control and manipulate the nicotine levels in its cigarettes.'' In Brazil, the Agriculture Ministry and the federal prosecutor's office in Rio Grande do Sul state are investigating the cultivation of fumo louco. Souza Cruz controls 85 percent of the Brazilian cigarette market and is among the world's top exporters of tobacco, with major customers in the United States, Britain, Japan and Germany.