The fit Bottle-O Fenton St store owner - who is a former Bollywood movie choreographer, kickboxer and regular runner of up to 20km - was yelling at the thief "run, how far can you run?".
He only got about 100m down the road, with Dhillon hot on his tail, before the thief fell to the ground. Dhillon told the thief "come on, get up" but when he did, the thief's pants had fallen down.
"I could see his bum," Dhillon told the Rotorua Daily Post.
"Everyone was standing around laughing and he was crying like a baby."
Dhillon told the thief he would let him go. The thief ran off towards Amohau St, leaving the box of Barrel 51 Bourbon n Cola he had stolen from the store behind.
The 51-year-old store owner can be seen on CCTV footage casually walking back into the store, putting the box back on the shelf before heading to the counter to serve a waiting customer.
The drama unfolded on Saturday about 8.25pm and was captured on CCTV. The footage has been posted on social media and has attracted thousands of comments and shares.
Two hours earlier at 6.35pm, footage shows the same man entering the store and buying a can of alcohol. Little did Dhillon know at the time, the thief had put a packet of peanuts down his pants before walking out.
Dhillon owns five Bottle-O stores in Rotorua and one in Tauranga, said he had chased numerous thieves in his 16 years of owning the stores.
While he never put his life in danger and always told his staff to remember they had insurance, he was also prepared to defend his livelihood
"I am looking after my earnings. I have a family like everyone else. I do what I can but if it's too dangerous I will not do it."
Dhillon came to New Zealand with his wife in 2004 after making a living in Bollywood movies in London in the 1990s.
He moved to New Zealand with his family for a quieter lifestyle.
Dhillon said he had security cameras around all of his stores and his staff could see every store.
He was keeping an eye on his other stores on the cameras when the thief walked in on Saturday night. He said the thief initially tried to grab a box and walk straight out but Dhillon quickly yelled at him: "Oi, do you want a cold one?".
Dhillon said he always kept something behind the counter to protect himself. Given his history in kickboxing, he always had nunchucks as he said he liked to practice with them in his spare time.
He admitted it was almost a daily occurrence a few years ago that people tried to steal alcohol but social media pages had acted as a good deterrent.
He said the homeless living on Fenton St also now respected him and many didn't even bother coming into the store if they were too drunk.
"I speak to them nicely and I say 'come in, I don't want to see anything go missing'. Or I tell them to choose a person who isn't drunk who I can serve. All the homeless respect me and never put their feet in my shop. If they come in drunk I say 'oi, not today, come back tomorrow' and they say 'okay Dhillon'. I know how to handle them."
Dhillon said he didn't make a complaint to police this time because he got his box of alcohol back but he had worked with police several times before, describing their service as "brilliant".
