A man in his 20s died after allegedly helping to break into the Bottle-O, next to Bathgate Park, in Hillside Rd.
He and four others fled the scene in a car and were later pursued by police before crashing into a power pole in Melbourne St.
Police last night appealed for information, saying three people were in custody and one person remained in hospital after the crash.
A police spokeswoman said police were called to the liquor store about 1.25am on Saturday and soon after officers found the vehicle and attempted to stop it.
However, the driver refused to stop and fled the scene.
Less than a minute later, the driver lost control of the car at high speed and skidded about 50m down the street before crashing.
"One of the five occupants — all aged in their 20s — died at the scene.
"Two were taken to Dunedin Hospital in a serious condition, and one had minor injuries," she said.
Bottle-O Hillside owner Michael Sumner said the suspects cut the locks off a storage garage with bolt cutters and took six crates of beer.
"It sounds really callous, but I’m not as upset as maybe everyone thinks I should be or could be.
"I’m sorry that it happened. I’m disappointed in the whole situation.
"But all that grief now, for such a small thing - $300 worth of beer - such a stupid thing."
Mr Sumner said he felt bad for police who would no doubt fall under the microscope again for high-speed pursuits.
"I know for the last 10 years, they’ve been getting bashed on for this sort of thing ... but I can’t blame the police.
"At 3.30am, they told me they had caught them but I didn’t know someone was hurt, so I was clapping my hands, thinking I’ll be able to stand in front of them in court and see who they are."
Southern district commander Superintendent Paul Basham said police officers aimed to keep the community safe, and a tragic outcome was the last thing anyone wanted.
"Incidents like this have huge impacts for everyone involved - those in the fleeing vehicle, as well as attending police.
"Our message to people is quite simple - if you are signalled to stop by police, then stop.
"The potential outcome is so much worse if you choose to flee."
He said a criminal investigation had started but it was still in its early stages.
Police had also referred the matter to the Independent Police Conduct Authority.
Melbourne St remained closed to traffic until about 3.30pm yesterday.
Delta contractors were at the scene working on the power pole.
Last night, Detective Senior Sergeant Nik Leigh said police were seeking any information, CCTV or dashcam footage, between 1.10am and 1.30am on Saturday, May 27, in the vicinity of Macandrew Rd, Kirkcaldy or Melbourne Sts.
