Surfactant based systems are ubiquitous in everyday life products, including food, pharmaceuticals, and
detergents. In concentrated solutions, surfactants may assemble into multilamellar, onion-like vesicles,
whose size distribution is known to be affected by the action of flow during processing and usage.
However, very little is known about the dynamic behaviour and the mechanisms by which the packed
microstructure of a surfactant multilamellar vesicle (MLV) is deformed under flow. In this work, the
microstructure of surfactant MLVs is investigated both at rest by confocal microscopy and under flow by
a rheo-optical parallel plate apparatus using bright field and polarized light microscopy. Small MLVs
have a more homogeneous multilamellar structure extending to the vesicle centre and show small
deformation regimes, such as tumbling and breathing. Larger MLVs have an inner isotropic core
surrounded by a multilamellar shell and can also exhibit a tank-treading deformation mode depending
on the flow conditions. The main result of this work is that tank-treading is associated with the
formation of parabolic focal conic defects in the outer shell, which is driven by shear-induced bilayer
dilation and undulation as in smectic A liquid crystals, and with convection-induced surfactant rearrangement
at a constant shell volume. This finding is supported by the analysis of vesicle retraction
upon cessation of flow, which scales with the inverse third power of radius and thus is consistent with
the effect of a compressibility modulus