The separation of secondary oil in water dispersions in packed-bed coalescers has become a subject of growing interest. This interest is driven largely by environmental legislation. Permitted oil in water concentrations in effluent are being limited to the 15 to 30 ppm level in many jurisdictions. As packed gravity separators are standard separating devices for oil-water separation, the question arises as to whether such devices can meet the new effluent limits. It is apparent that such low effluent concentrations from gravity separators can only be realized, in general, if the finest drops in a dispersion, secondary drops (drops with diameters less than 100 mu m), coalesce and are separated from the continuous phase. In this paper we show that while drops from all size ranges coalesce on packing surfaces, secondary drops are also produced during drop detachment from all packing surfaces and the net coalescence rate for secondary drops is low. Our principal conclusions are that the maximum size of secondary drops produced on packing surfaces is independent of the nature of the packing material, and that this drop size can be expressed as a simple function of the physical properties of the dispersion.