Five years on, more people are drinking it than ever before. The death and rebirth of Rotkappchen can also be seen as a symbol of the way in which today's east Germans have sought to re-establish their pride.
Five years ago this month, the West German deutschmark officially became the currency of not-quite-dead East Germany (which was fully swallowed into the west three months later). Result: complete abandonment of everything that had anything to do with the old east. Western meant glossy and good; eastern meant dusty and bad.
In 1989, communism's final year, East Germans bought 15 million bottles of Rotkappchen, popularly known as "Red Riding Hood" because of the trademark glossy red foil over the wired corks. In 1991, less than three million bottles of Rotkappchen were sold. East Germany was dead; and so, it seemed, was Rotkappchen.
Perhaps, though, Red Riding Hood was merely catching her breath. Rotkappchen is by far the most important Sekt, or sparkling wine, in east Germany today. Eighteen million bottles were drunk last year.
In the little wine-growing town of Freyburg, south-west of Leipzig, Rotkappchen is a source of much local pride. Unusually, too, the management has stayed mostly in east German hands (with west German investment). Rotkappchen has even explored the possibility of buying up a west German firm of Sekt producers, which had got into financial difficulties.
Signs of the new self-confidence are everywhere at the sprawling old Rotkappchen plant. There has been millions of pounds worth of investment in huge new fermentation halls and production lines. Rotkappchen has been repackaged, to remind people of the drink's previous, non-communist history. Last year it celebrated its hundredth anniversary with great fanfares.
Not surprisingly, morale has improved. According to Helga Tscharnke, a bottling worker at Rotkappchen for years, "lots of colleagues had to go. We didn't know if we would survive. It was a nervy time. Now, we've got lots of people back again".
Even now, however, five years after German unity, Rotkappchen's strength is almost entirely as an east German product. The directors dream of breaking into the west German market and Mr Lange talks optimistically of a recent "tripling" of the western market share. That sounds dramatic - until you realise that he is talking of a leap from 0.1 to 0.3 per cent.
Most west Germans still tend to scorn or ignore it. But, as one Freyburger noted, "we discovered that the western stuff isn't any better. That's nice".
In that respect, Rotkappchen is by no means a lone exception. German unity has gradually begun to grow, in the sense that the raw west-east tensions of a couple of years ago are now reduced in terms of consumption patterns and attitudes. But the differences are still enormous.
Meanwhile, everybody now likes to exploit the symbolic qualities of Rotkappchen. Unsurprisingly, the PDS, successors to the East German Communists, invariably serve Rotkappchen at their receptions. But Rotkappchen has enthusiasts in more surprising circles, too. On one occasion, at a mini-celebration in Helmut Kohl's office in Bonn, the chancellor apparently took delight in revealing to his startled colleagues the identity of an unidentified Sekt.
Rotkappchen didn't perhaps taste as dreadful as rumour suggested after all.