By Basil Katz

NEW YORK (Reuters Life!) - Perfume makers, sniffers and vendors are upset over the International Fragrance Association's (IFRA) latest rules governing what can go into a scent's formula.

With the association aggressively seeking to reduce or eliminate allergens, some insiders say Chanel's iconic No. 5 perfume may be in danger.

"There are many unanswered questions, and I doubt that Chanel will ever speak the truth because this sensitive matter might affect sales and corporate image," said Octavian-Sever Coifan, a perfumer in Paris.

IFRA groups 90 percent of the world's fragrance houses and acts as the industry's main regulator, often issuing more aggressive safety standards than public watchdogs such as the European Union.

For member companies, compliance with IFRA is mandatory.

"There seems to be a steady build-up of regulatory rules," said Luca Turin, a scientist and perfume expert at the Massachusetts Institute of Technology.

"All the legacy fragrances, these works of art, are being steadily destroyed," Turin said. "You aren't obliged to put airbags on a vintage car. Why do you with perfumes?"

A mild allergic reaction should not prevent great scents from being preserved, Turin said. After all, "to my knowledge perfume has never killed anyone," Turin said.

The IFRA says consumer safety is the overwhelming priority.

"It's not necessary for someone to die before we establish a safety standard," said Matthias Vey, IFRA's scientific director. "Skin contact is our biggest concern, and if you are sensitized you can develop a rash, skin redness, itching and swelling."

'A NECESSARY EVIL'

Steven Weller, IFRA's spokesman, called strict regulation "a necessary evil," adding, "If it prevents an allergic reaction, then so be it."

IFRA's standards on jasmine absolute, a critical component in Chanel No. 5, were issued in July 2008 and must be in place by August 16, 2010. Jasmine is not to exceed 0.7 percent of the final product. This is the first time a standard has been put on jasmine.

Chanel, a privately held Paris-based fashion company, said No. 5 was in no immediate danger.

"When the new IFRA standards were issued we immediately checked the percentages of jasmine grandiflora and sambac in our finished products, and in none of our fragrances is the recommended level exceeded," Chanel's deputy perfumer Christopher Sheldrake said in a statement.

One perfumer said consumers notice even the most skillful reformulations.

"Even water if you investigated enough would become something dangerous," said Isabelle Doyen, head perfumer of the French fragrance house Annick Goutal. "What's terrible is that you put in place the formula and within one or two years you have to rework it."

The solution may be to place warning labels on perfumes that contains known allergens, but big companies fear that would hurt sales.

Fragrance sales in the United States in department stores and Sephora stores generated $2.7 billion dollars (1.84 billion euros) in 2008, down from $2.84 billion (1.92 billion euros) in 2007, according to the NPD Group market research company.

(Editing by Daniel Trotta and Will Dunham)