In 1978, Racecourse Co-operative conducted a feasibility study on rationalisation of the district's co-operatives and in 1984, the district's milling co-operatives set up a merger committee for an in-depth study of a five-mill merger.

Progress seemed to be good, when, in late 1986, all the mills signed a memorandum of understanding. The process derailed soon after, due to disagreement about conditions in the document. The merger committee renewed its efforts in 1987 and, after concentrated negotiations, a successful vote by shareholders of each co-operative saw the amalgamation of the district's five co-operatives and the purchase of the CSR Limited-owned Pleystowe Mill.

Mackay Sugar Co-operative Association Limited was finally incorporated on February 1, 1988 - a date of tremendous significance in the history of the Australian sugar industry. The merger had created a large financially viable co-operative sugar milling entity which would maximise the returns to growers from cane production and sugar manufacture, buffering shareholders from the difficulties faced by small ‘stand-alone’ co-operatives.

As part of its strategy for greater efficiency, two mills were closed and their plant and equipment integrated into the remaining mills. North Eton Mill was closed at the end of the 1988 crushing season and Cattle Creek, at the head of the Pioneer River valley, was closed in 1990.