Vertical oligopolies with firms of different quality levels compete and select customers based on their private information. In this setup, higher-quality firms serve higher-quality customers. Firms distort customer allocation below a certain threshold but improve it above. Even with some differences between firms, there are equilibrium strategies that satisfy certain conditions. Private information has a big impact on welfare compared to a monopoly situation. As entry costs decrease, the equilibrium approaches a competitive scenario. Mergers can change the game for multi-plant firms with outside options.